Pfizer boss promises to "honour commitments" as MPs question takeover bid

Guy Bentley
Follow Guy

Senior officials from US drug company Pfizer have been given a grilling by MPs over the proposed to takeover of Astrazeneca.

Committee chair Adrian Bailey opened the questioning by asking Pfizer chief executive Ian Read how he felt about his company being called a preying mantis. Read replied that he was proud of the company's record.

When asked whether Pfizer would maintain the $12bn R&D budget of the two companies Read told the committee it was unlikely.

The US company responded to criticism over cost cutting in R&D and jobs by observing that Astrazeneca itself had slashed its UK workforce by 40 per cent.

The Pfizer boss said the UK's attractive tax regime was an important factor in the company's decision to pursue the takeover but it was only one factor of several. He said the merger would create greater efficiencies and provide opportunities for new drugs.

The company reiterated its commitment to have 20 per cent of its worldwide R&D headcount in the UK. Read called the commitment "unprecedented".

Several MPs tried to tie down the Pfizer representatives on how much the company would benefit in terms of tax savings.

Executive vice president Frank D'Amelio said the company's total tax savings from the deal, should it go ahead, was sensitive information and it would be premature to disclose such figures so early in the process.

Pfizer confirmed that its headquarters will stay in New York given its substantial commitment in the US.

Labour MP Willie Bain, told the witnesses that the fundamental problem was whether they Pfizer could be trusted. Bain Asked "why on earth should we believe you?"

Read reiterated that Pfizer would honour the commitments it had given and would later insist that it was an ethical company.

Conservative MP Brian Binley, told Read he had some "pretty good coaching" and attempted to pinpoint where exactly Pfizer would cut costs. Read said "there will be some jobs lost somewhere" but could not say how many or where they would be.

The Pfizer bosses were asked what the tax benefits would be to the UK government should the merger proceed. Read said the taxpayer would benefit from a successful company generating higher profits and therefore greater tax revenue.

The company set out to reassure MPs that it was still a source of innovation, with 300 products in its pipeline and a host of new vaccines.

Nadhim Zahawi asked Read which takeovers he thought had gone well, to which he responded the Wyeth acquisition.

MPs were on the whole were unimpressed with the commitments given over jobs and the company's response over its tax arrangements. Astrazeneca has released a statement labelling Pfizer's bid an "opportunistic attempt" to purchase the drugs giant at a price that doesn't reflect the value of the British company's pipeline of new drugs.