AstraZeneca knows there is no room for sentiment as Pfizer circles

My Week

If you ask a globe-trotting chief executive like Pascal Soriot of AstraZeneca where is home, he points to Sydney, where his grandchildren are, not Paris, where he was born and studied. The subtext is: look forward, not back. The next generation decides domicile more so than the hand of history.

Where does that leave a company like AstraZeneca, the pharmaceuticals giant with decades of heritage and investment in Britain, which is under siege from larger rival Pfizer? The sweetened, then quickly rejected, £63bn proposed takeover would break records. Despite the keening of some politicians and science luminaries, I believe a deal at a higher price will happen.

No company has a divine right to exist because it has an illustrious history. In recent years, AstraZeneca’s record hasn’t been that illustrious either, as it failed to replace several blockbuster drugs that went off patent.

But just as Mr Soriot has plotted a path to growing its turnover again with some promising cancer drugs in the pipeline, whether the company has a future rests with shareholders, who must decide whether cash and shares today compensate them sufficiently for who knows what tomorrow.

Such crystal-ball gazing decides where headquarters lie. No crystal ball is required to divine that Pfizer is a ruthless integrator of businesses. Investors still rejoice at how efficient it was in merging Warner Lambert after acquiring the American business in 2000. We saw at first hand how dispassionately it can close facilities after the sell-off of its historic Kent campus was announced three years ago. Even better, take a look at what happened in Uppsala, the university town an hour’s drive from Stockholm. Once the base for Swedish drugs giant Pharmacia, bought by Pfizer in 2002, now there is little evidence of it after assets were sold and manufacturing relocated.

Pfizer’s chief executive Ian Read yesterday sent an impressive list of pledges to David Cameron, covering British jobs, research and manufacturing for the next five years. Should the deal go through, it must be hoped that Pfizer has a better record in keeping its word than Kraft, which pledged to keep open a Cadbury factory in Bristol that had been slated for closure, only to proceed with shutting it soon after the ink had dried on its takeover.

Mr Soriot knows only too well that home is where the heart is but, in business, that sentiment is always overruled by the head.

Nissan shows fight to stay  in Europe is a rocky road

 I spent Monday morning at the offices of the City law firm Clifford Chance chairing an event for TheCityUK, the umbrella body that promotes Britain’s financial and professional services. Three pieces of research were unveiled to add weight to the argument that Britain is better off in Europe than out, assessed from economic, legal and business perspectives.

Concerns that the City would suffer from uncertainty, reduced market access and a loss of influence if Britain withdrew are well rehearsed. The legal paper argued that where we are involved in developing new regulations, Britain is adept at getting its own way. That is true in relation to the Market Abuse Directive, but hasn’t been the case with attempts to overhaul a short-selling ban or block a financial transactions tax. And for all the consensus in the room, bosses see Ukip riding high in the polls and realise they have to do more to sell the merits of Europe to the electorate.

An anecdote from Michael Moore, Nick Clegg’s European business affairs adviser, shows the scale of the challenge. On a recent trip to the Nissan factory in Tyne and Wear, he found that workers were no more pro-European than the man on the street. And this from a factory where about 70 per cent of the cars rolling off the production line are left-hand drive and heading straight to the Continent.

Sir Win’s watchdog job should be easy after Lloyds

 As well as speaking at TheCityUK event, Sir Win Bischoff, the chairman of the organisation’s advisory council, took over the reins at the Financial Reporting Council from Baroness Hogg this week.

The FRC was tidied up on her watch. A federation of committees emerging from industry self-regulation were blended under a single umbrella to regulate the accountancy profession and also set the corporate governance code for British boardrooms.

It might not be as busy as the early months of chairing Lloyds Banking Group, but Sir Win insists there is plenty to do. Getting investors including sovereign wealth funds to sign up to a stewardship code to aid their engagement with companies has proved slow going. Sir Win is confident it will get better, not least because the International Forum of Sovereign Wealth Funds is moving its main base to London from premises at the International Monetary Fund in Washington DC.

The trouble with corralling shareholders in London’s blue-chip companies to do anything – such as repel a takeover offer – is that they are so diverse. More than 50 per cent of the shares in UK plc are owned from overseas. Sir Win thinks it’s a greater proportion in Germany and France.

Also in his in-tray is simplifying companies’ annual reports, specifically when explaining executive pay and the runic tables of data on salary, short-term bonuses and long-term incentive plans. If Sir Win can help to lead Lloyds back from the brink, this should be a doddle.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...

Ashdown Group: Development Manager - Rickmansworth - £55k +15% bonus

£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...

Recruitment Genius: Security Officer

£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...

Ashdown Group: Business Analyst - City, London

£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss