Sweden’s government urged shareholders of AstraZeneca Plc to reject a takeover by Pfizer Inc., saying the deal risks hurting the largest Nordic economy.
“What we’re now seeing is a hostile process where a very important reason for the deal seems to be” to cut Pfizer’s tax burden, Finance Minister Anders Borg said today in Stockholm. “There’s a worry that tax-driven deals can result in that potential profits will be achieved through cost cuts.”
Pfizer is meeting opposition from policy makers in Sweden and the U.K. on concern the U.S. company’s proposed $102 billion takeover will cost research jobs. U.K. lawmakers this week questioned Pfizer executives and Sweden’s government is escalating its opposition in an election year.
Borg this week said he has spoken to the U.K. government about his concerns that the deal is driven by taxes and may result in job cuts. Since Sweden’s Astra AB was bought by Zeneca Plc in 1999, the company has reduced its presence in the country. Its workforce in Sweden now stands at 5,900, about 11 percent of the London-based company’s total and down from 8,419 in 2008 before the shuttering of sites in Lund and Soedertaelje.
According to Borg, about 60 percent to 70 percent of similar deals don’t generate “good returns” for shareholders and society. He earlier told reporters that Pfizer’s actions weakens Sweden’s resistance against those members in the European Union who argue countries should introduce regulation to protect themselves against foreign takeovers.
“It’s an activity where we are very big financiers,” Borg said. “We’ve invested a lot of resources, more than most countries, in life science.”
Pfizer, based in New York, made an initial offer in January, citing the company’s promising product pipeline and the ability to change its headquarters to the U.K. to gain a corporate tax cut. AstraZeneca has since rejected a raised offer and Chief Executive Officer Pascal Soriot said on May 14 that a sale of the U.K. drugmaker is “not inevitable.”
Pfizer plans to raise its offer again, people with knowledge of the matter have said.