Political row looms as Pfizer goes public with £62bn AstraZeneca deal

Pfizer’s ambitions to take over Britain’s AstraZeneca for nearly £62bn looked set to trigger a political crisis for the Government after the United States giant refused point blank last night to safeguard British jobs.

The takeover plot, confirmed for the first time by Pfizer yesterday, was being talked of in similar terms to the deeply unpopular sale of Cadbury Schweppes to Kraft of the US, which saw the American buyer renege on a promise not to close a major plant in the UK shortly after the deal was done.

As in the original bid for Cadbury Schweppes, the target, AstraZeneca, quickly rebuffed the first offer, declaring it “significantly undervalues AstraZeneca and its prospects” but City analysts are expecting the Viagra-making predator will come back with a higher one.

Pharmaceuticals are Britain’s biggest export after machinery and cars, and the industry has been identified by the business Secretary, Vince Cable, as a key strategic area for support in the economy.

But in terms of industrial relations, Pfizer is best known in Britain for the closure of its huge plant in Sandwich, Kent, with the loss of 2,400 jobs in 2011.

In an attempt to face off a potential political backlash, Pfizer executives have contacted the British government with assurances about their investment plans.

Pfizer also said yesterday the combined company would be domiciled in the UK, because the lower tax regime is more attractive than that of the US.

But the scientific community was unconvinced. Sarah Main, director of the Campaign for Science and Engineering, said: “AstraZeneca and GlaxoSmithKline are the two pillars of the UK’s thriving and economically important life sciences sector, supporting biotech and academia across the science base. To lose one of them to foreign ownership would be a blow.”

Unions also spoke out against the deal, and Labour took an initially sceptical view, demanding the deal should only be allowed to proceed if it came with guarantees of long-term investment in the UK.

Pfizer’s chairman and chief executive Ian Read was quick to respond to the growing concern, saying his company had held “preliminary discussions” with the Government.

“We want to have a conversation with the Government about the excitement we have about combining these portfolios, the excitement we have about the strength of UK research.

“This combination, if it occurs, would create, domiciled in the UK, the largest pharmaceutical company in the world and would bring an injection of about $100bn (£59bn) into the UK economy,” Mr Read said.

So far, the Coalition has distanced itself from the deal.

The Chancellor, George Osborne, on  Friday dismissed the issue as “a commercial matter between the companies”. One of its main plants, Alderley Park in Cheshire, is in his constituency.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border