AstraZeneca good, Pfizer bad? It's not as simple as that, unfortunately
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.
Wednesday 14 May 2014
Outlook If the future of AstraZeneca were to be decided by public relations, Pfizer would by now have departed these shores with its tail between its legs, never to return.
We like to think in terms of goodies and baddies and Pfizer has been cast firmly in the role of baddie. It's become the corporate pantomime villain we love to hate.
The immediate media reaction to yesterday's hearing of the Business Select Committee demonstrated that.
AstraZeneca's boss Pascal Soriot warned darkly that the disruption created by a merger could delay the development of vital new drugs and that people could die as a result.
Pfizer has already been successfully portrayed as a heartless and evil tax avoiding, asset stripping American corporate thug of the first order. Now it's much worse than that: now it's a corporate killer. Booo, hisssss. Pass out the rotten tomatoes. How long is it before Ukip pops up with an opportunistic cry of "send 'em back to where they came from"?
Here's the thing – and no, I'm not on Pfizer's payroll and I didn't have a conversation with its malfunctioning PR machine before writing this – Mr Soriot is throwing bricks from a glass house.
The clue is in the name: AstraZeneca. This is a company that was itself the creation of a mega-merger. Moreover, it has been heavily involved in wheeling and dealing just as Pfizer has, gobbling up a succession of smaller pharma firms over the years.
As the charge that Pfizer is a ruthless cost cutter, again, what of Astra? Faced with falling profits and the need to keep investors sweet, Astra's executives have also fallen back on the City's drug of choice – slashing costs and jobs, including research posts.
Moreover, while the "assurances" Pfizer has given about the UK don't amount to a hill of beans, yesterday's appearance before the committee by its chief executive and finance director says a lot. The committee has no powers of subpoena. When the bosses of food giant Kraft were invited to testify over their plans to eat Cadbury, they greeted the summons with raised middle fingers and stayed away before trampling over the assurances they had given about their plans when they won the day.
Pfizer is different. It wants to be here, and for the long term. And so it wants to play nice. In part, it's true, because the tax situation is favourable. But the reason we set it up like that was to encourage people like Pfizer to do business here. That's not to say Pfizer's plans are necessarily good for this country. This deal remains, on balance, a bad one for UK plc. And the apparent powerlessness (or inertia) of the Government in the face of Pfizer's activities given Astra's strategic importance to the UK should disturb us and spark an urgent debate.
But the debate that is currently being conducted around the merger itself has become dominated by half truth, illusion and spin. Pfizer is not quite the baddie it seems and Astra, whose chief executive has said he will accept a compelling offer, remember, is anything but the goodie.
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