Pfizer's backer Sir Richard Sykes has been wrong before on drugs firm deals
Outlook As any salesman will tell you, there's nothing like a testimonial to convince a potential buyer. Which is why the highly paid executives Pfizer has hired to flog its takeover of AstraZeneca have found two cheerleaders (only two, mind) to recommend their offer. Both are quoted at length on Pfizer's page-long sales pitch posted on its website.
One is Ian Read. He says the merger would see the two companies' operations in Oxford, Cambridge and London retain their "Golden Triangle" status and be a key part of the combined global business. But Mr Read is the chief executive of Pfizer, so his views are perhaps biased.
The other is Sir Richard Sykes, the former chairman and chief executive of GlaxoSmithKline. Sir Richard describes the merger as a "fantastic opportunity to work in a country with a scientific background". At least, the presentation makes it look like that's what he said. In fact, reading the small print, he seems to have been talking in more general terms about the UK. But hey, that's advertising.
The copywriter's sleight of hand aside, Sir Richard has been one of the few big guns in industry to commend the takeover. Other dignitaries, from Sir Michael Heseltine to Lord Sainsbury, have been vehemently opposed. So Sir Richard is to be applauded for having the guts not to go with the flow. For standing up against the noisy consensus.
It wasn't so, though, when he was chief executive of Glaxo Wellcome and brought his company into the arms of SmithKline Beecham in 2000. That deal, which also created the world's biggest drugs company, ended up being one of the most value destructive, not to mention job destructive. But at the time, Sir Richard trumpeted its "unbelievable financial power" and "vision".
A few years later, when the deal was looking like a flop, Sir Richard admitted he was railroaded by the clamour of investment bankers and fund managers demanding it. Actually, he disclosed, he never really wanted a merger at all. He even penned a report concluding "growth for growth's sake via takeovers has been a prime cause of shareholder value destruction".
Pfizer argues, of course, that this is not just a deal about "growth for growth's sake". It's about avoiding US taxes too.
But let's put that multi-billion dollar tax bonus to one side. Pfizer highlights other selling points: the deal will, it says, "speed development of treatments". Unlikely: scientists fear the merger will disrupt funding of potentially successful projects and disband close-knit research teams.
It talks of how the deal will "deepen research efforts". AstraZeneca employees read that as "merge R&D teams". No thanks.
It says it will strengthen areas like oncology. Translation: "give Pfizer shareholders a chunk of the benefits of AstraZeneca's cancer breakthroughs."
Note to the Coalition leaders: it wasn't just Sir Richard who called the Glaxo deal wrong in 2000. MPs on the Science Select Committee gave it a ringing endorsement, too. Many scientists didn't. They said from the start that merging Glaxo and SmithKline was a pointlessly risky exercise.
Now, they seem to think this deal is crazy too. Perhaps we should take notice.
- 1 Malaysian cyclist could face disciplinary action after 'Save Gaza' gloves protest
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 Fifty Shades of Grey trailer provokes moral outrage from US parenting groups
- 4 McDonald’s removes chicken nuggets from the menu in Hong Kong amid major food scare
- 5 Students offered grants if they tweet pro-Israeli propaganda
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
John Barrowman praised for Commonwealth Games opening ceremony gay kiss
iJobs Money & Business
£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...