The American drugs giant Pfizer has signalled that it will abandon its proposed £63 billion bid for AstraZeneca if it fails to secure the British Government’s active support for the move, it has emerged.
The warning came as David Cameron tempered his previous strong support for what would be the biggest takeover in British corporate history.
Amid Coalition tensions on the issue, the Liberal Democrat Business Secretary Vince Cable has promised to adopt a “studiously neutral” approach to the potential acquisition.
He has also refused to rule out altering the public interest test to enable ministers to block takeovers that threaten the country’s scientific base.
The US conglomerate would be very unlikely to proceed with its bid in the absence of the Government’s blessing, the Bloomberg financial news agency reported, citing a source close to the deal.
Pfizer is said to have acknowledged that Britain could make the business environment much more difficult for the company, particularly in an industry as heavily regulated as pharmaceuticals.
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Mr Cameron has been accused by Labour of “cheerleading” in his initial response to the planned takeover amid claims that Pfizer could cut jobs and erode the quality of scientific research in British laboratories.
Last week the Prime Minister said the Government had received “robust” assurances from Pfizer, while Tory ministers reacted enthusiastically to the possible merger.
But Mr Cameron told MPs yesterday that he wanted further commitments on jobs and investment from the American company in continuing talks over the bid.
He described criticism of his handling of the proposed deal as “extraordinary”, but added: “Let me be absolutely clear, I’m not satisfied, I want more. But the way to get more is to engage, not to stand up and play party politics.”
Labour is calling for amendment to the Enterprise Act to give the Government the ability to veto acquisitions of UK companies conducting scientific research. It has said it is prepared to force a Commons vote on the change, which it says can be achieved through secondary legislation.
In heated exchanges, Ed Miliband, the Labour leader, said: “If you do not take action now, and the bid goes through without a proper assessment, everyone will know you were cheerleading for this bid, not championing British science and British industry.”
Mr Cameron sidestepped the call for altering the Act and retorted: “I think it is deeply sad the leader of the Opposition makes accusations about cheerleading when what the Government was doing was getting stuck in to help British science, British investment and British jobs.”
Tory sources have claimed Mr Miliband faces questions over his impartiality after it emerged that Baroness Vadera, a Labour donor and a party donor, sits on AstraZeneca’s board of directors, which has turned down three Pfizer bids.
It has also been disclosed that Mark Textor, an Australian strategist who has worked for the Conservatives, has also advised Pfizer. His business partner, Lynton Crosby, is Mr Cameron’s election campaigns director.
Bosses from Pfizer and AstraZeneca will be cross-examined on the impact of a potential deal by two Commons select committees on successive days next week.
Ian Read, the Pfizer chairman and chief executive, and Pascal Soriot, the chief executive of AstraZeneca, have been summoned by the Business, Innovation and Skills Committee on Tuesday and the Science and Technology Committee on Wednesday.
The latter will also question David Willetts, the science minister, about the Government's position.