THE LABOUR party is demanding that the bosses of Pfizer and Astrazeneca are called in front of a Westminster select committee and questioned over the proposed £63bn pharmaceuticals mega-merger.
A political row has escalated around Pfizer’s bids, with opposition leader Ed Miliband proposing an additional public interest test to determine if this deal, and future acquisitions, are in the national economic interest.
Miliband has accused the coalition government of “cheerleading” in support of US giant Pfizer. Its advances on Astrazeneca, which employs around 6,700 people in the UK, have so far been rebuffed.
Shadow business secretary Chuka Umunna yesterday echoed Miliband’s concerns and argued that Pfizer boss Ian Read, as well as Astrazeneca chief exec Pascal Soriot, should appear in front of the Science and Technology Committee next Wednesday, 14 May.
The committee is chaired by Labour MP Andrew Miller, and also includes five Tories and one Liberal Democrat.
Soriot, who believes that Pfizer’s £50-a-share offer undervalues his company, would be happy to speak to the committee, City A.M. understands.
Sources close to Pfizer say the company is willing to engage in any political processes surrounding the deal, having flown in Read to meet with the government last week.
Pfizer has made a list of pledges to the UK, insisting that it would continue with and complete the development of Astrazeneca’s new research and development (R&D) hub in Cambridge.
“Substantial” factory activity would remain in Macclesfield in the event of a takeover, Pfizer said, adding that it would aim for a fifth of the combined company’s R&D staff to be based here in Britain.
Yet a Labour spokesperson told City A.M. that the promises, sent to Prime Minister David Cameron, are not enough, arguing that previous takeovers show that assurances “sometimes aren’t worth the paper they’re written on.”
Read has not ruled out a hostile bid for Astrazeneca, saying yesterday that he remains “very disappointed” with its board’s “unwillingness to engage in conversations”.
“It is in the best interests of both companies that we pursue a friendly negotiated transaction that can be recommended by both our boards,” Read said, adding that Pfizer is “considering all options on how we progress these discussions”.
“We listened to the shareholders and made what we thought was a compelling offer. We are awaiting further commentary back from Astrazeneca,” Read told investors yesterday, after unveiling the firm’s latest quarterly results.
Pfizer has been battling against falling sales in recent years, with a nine per cent drop in first-quarter revenue disappointing the US market yesterday. Shares in the maker of viagra ended 2.6 per cent lower in New York last night.