James Moore: Should government step in over the AstraZeneca bid?
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Monday 28 April 2014
Hunting season is officially open for America’s gun totin’ multinationals.
General Electric is looking to land a trophy in France, while Pfizer’s now officially come to Britain in the hopes of hauling something back to hang above the doors of its corporate headquarters.
Care to guess who’s having an easier time of it?
France, of course, was the nation that decided yoghurt was a strategic national asset, thus keeping Danone out of the cross hairs of the likes of Pepsi or Kraft, both of which have at various times been linked to possible bids for the company.
True to form, the French Government has warned GE that it will block any bid for engineering group Alstom that it doesn’t like. That might just mean any bid at all from GE, whatever its chief executive Jeff Immelt had to say when he met with French President Francois Hollande given France’s preference for a European solution.
By contrast the question Pfizer has raised about AstraZeneca’s future as an independent company here is being brushed off as a commercial matter between two companies. Even if it concerns a sector - pharmaceuticals - deemed strategically vital to Britain’s future economic prosperity.
Let’s make one thing clear from the outset. I’m not about to argue for importing France’s approach to takeovers into Britain, not least because granting companies a pass when it comes to bids grants their managers a pass when it comes to doing their jobs.
UK plc needs the complacency in the boardroom this can generate like teenaged boys need Pfizer’s Viagra.
The banking crisis is a graphic demonstration of the damage that can be caused by the self regard and hubris of a corporate elite in a sector deemed vital to Britain’s economic future when it is coddled and cosseted.
And it’s worth mentioning here that Astra hasn’t been immune from the practice of handing over outsized packages for undersized performance.
It has, in truth, been trying the patience of its shareholders for some time now and while it has some very interesting potential treatments in development - such as the cancer treatments that utilise patients’ own immune systems to fight the disease - investors could be forgiven for questioning whether the senior figures the company has in place are capable of delivering on the promise these may offer.
It’s even debatable as to whether AstraZeneca should be considered a British company. Its operations are global and it’s run by a Frenchman. Pfizer is no different. It’s run by a Brit and such is its loyalty to Uncle Sam that it prefers to spend the billions it has stashed overseas on an expensive and potentially value destructive deal with Astra rather than bring overseas profits home and pay tax on them.
All the same, it is disturbing that these points are scarcely being discussed in the corridors of power. Whether this deal is good for Britain - and the two companies combined employ thousands of people here - will, as is so many previous examples, have no influence whatsoever on whether the deal ultimately gets done. Perhaps we should think about changing that.
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