Pfizer promises long-term commitment to UK
Pfizer has upped the ante in its fight to acquire AstraZeneca, raising its bid for the company and pledging a ‘long-term commitment’ to the UK.
Nevertheless, the firm says it can only guarantee to not cut investment for a five year period – reinforcing the fears for some that the firm is focused solely on profit.
The US firm’s chief executive Ian Read has made public a letter written to Prime Minister David Cameron, pledging that the company would employ a minimum of 20% of the combined company’s total R&D workforce in the UK.
The company has also pledged that AstraZeneca’s current plans to create a hub in Cambridge would go ahead, and that the centre would lead all European and some global R&D functions.
This pledge, twinned with a second increased bid for the Anglo-Swedish firm of £50 per share, raising the value of the bid to over $100 billion, will create new pressure on AstraZeneca’s board to accept the offer.
AstraZeneca’s chairman Leif Johansson yesterday spoke out against the Pfizer takeover bid in a special video message, indicating that he and the company board had faith in AstraZeneca as a standalone company.
Many UK commentators have also expressed their concern about the long-term impact of a takeover – many pointing to Pfizer’s closure of its own R&D centre in Sandwich, Kent in 2012, with the loss of around 2,000 jobs.
Ian Read’s letter to the Prime Minister is an attempt to quell growing fears in the UK that Pfizer will ‘hollow out’ AstraZeneca’s research base in the country, and that it is only interested in using the UK as a low tax base. Pfizer wants to switch its tax base from the US to the UK to avoid high US taxes on foreign-earned income, and to take advantage of low UK corporate tax rates.
Writing to Prime Minister David Cameron, Ian Read said a combined company would bring together world leading research expertise in key therapeutic areas such as oncology, inflammation, and cardiovascular and metabolic disorders, and would bolster the UK government’s efforts to create a world-leading environment for life sciences.
Read said: “Ultimately, establishing the world’s largest research-based pharmaceutical company in the UK, together with the commitments made in this letter represent a strong indicator of the incentives that your Government has created to attract successful business to the UK.”
Five year commitment
Pfizer has made it clear in the last week or so that no truly long-term commitments can be made on levels of investment. Read’s letter to the Prime Minister says the firm will make these commitments for a ‘minimum of five years’ but added that it reserved the right to “adjust these obligations should circumstances significantly change”.
AstraZeneca has responded to the renewed bid, saying its board will meet to discuss the proposal and that a further announcement will be made when appropriate.
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