Pfizer Inc., the U.S. drugmaker seeking to acquire AstraZeneca Plc, advanced its U.K. charm offensive with a series of videos extolling the scientific benefits, while downplaying the potential tax advantages.
“It really meets the scientific needs,” Chief Executive Officer Ian Read said today in a video and statement on Pfizer’s website. “It meets needs of efficiency, it meets needs of strengthening our balance sheet and strengthening our fiscal position.”
AstraZeneca rejected the bid of about $106 billion from Pfizer earlier this month. Buying the company would give Pfizer a lower tax rate and a portfolio of experimental cancer drugs. Read and Pascal Soriot, CEO of London-based AstraZeneca, will testify to U.K. lawmakers next week amid political tension over public-interest issues related to the takeover.
“AstraZeneca is well positioned to return to growth as an independent company and continue to deliver value to patients and our shareholders,” Esra Erkal-Paler, a spokeswoman for the company, said in an e-mail from London. “We have made significant progress with our fast-growing pipeline and our growth platforms are performing strongly.”
U.K. Chancellor of the Exchequer George Osborne told BBC Radio 4 today that the government wants to clarify what a deal would mean for British scientific research and jobs. Lawmakers are prepared to negotiate and engage both companies, he said.
The opposition Labour Party, which has criticized the government’s approach to the takeover and accused ministers of being “cheerleaders” for Pfizer, today called for a “stronger public-interest test” to be applied to the deal.
Prime Minister David Cameron, a Conservative, initially described the assurances on jobs and research investment that Pfizer gave on May 2 as “robust.” On May 7, he told Parliament the company “must do more.”
“The assurances Pfizer has given ministers are not worth the paper they are written on,” Labour’s business spokesman, Chuka Umunna, said in an e-mailed statement today. “Pfizer has since refused to rule out breaking up the AstraZeneca business and selling off parts of it.”
Read may also face government inquiries in the U.S. Pfizer has said it plans to keep the company’s operating headquarters in the U.S., even as its legal address shifts to the U.K. for the lower tax rate.
AstraZeneca shareholders will “get an immediate benefit from the cash that we would pay them,” Pfizer’s Read said. “It allows them to participate in a very strong combined company with great cash flows and a great portfolio, and it allows a very efficient allocation of capital.”
“Improving the efficiency of the organization” and the ability to “liberate the balance sheet and tax of the combined companies” are the key reasons for the takeover, Read said. “We liked where their science is being done, which is in the U.K. We liked the complementary nature of the portfolio.”