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British Lawmakers Press Pfizer For Job Guarantees

Tue, 05/13/2014 - 8:14am
Danica Kirka, Associated Press

LONDON (AP) -- British lawmakers pressed the chief executive of Pfizer on Tuesday to guarantee jobs should the American company succeed in taking over London-based AstraZeneca, prodding him on whether he could be trusted to honor promises made as part of the bid.

Ian Read faced Parliament's Business Innovation and Skills Committee to defend his company's $106 billion cash and stock offer. The U.S. drugmaker has sought in writing to ease worries that British jobs will be lost and research protected — but has so far failed to convince skeptical lawmakers.

Critics on the committee repeatedly raised Pfizer's track record, accusing the company of buying foreign firms and downsizing — and being less than honest about its intentions. Read was forced to place his personal honor — and that of Pfizer — on the table.

"We are a highly ethical company," he said. "We keep our promises."

AstraZeneca has rebuffed three approaches since January, saying Pfizer's last offer undervalues the company. AstraZeneca has stressed that a takeover would disrupt its work on a potentially lucrative pipeline of new drugs and that the five-year time window covered by the commitments is too short.

"From the lab to the patient takes many years," said AstraZeneca's CEO Pascal Soriot. "It's a question of avoiding distraction."

Pfizer meanwhile tried another strategy after its failure to persuade AstraZeneca's board, reaching out directly to stockholders even before the committee convened. It published what it said was a "compelling rationale for a combination."

"Pfizer wishes to enter into discussions with AstraZeneca regarding a potential combination of the two companies and remains disappointed at the lack of engagement by the AstraZeneca Board," the company's statement said.

In a memo Monday to parliamentary committees studying the overture, the U.S. drugmaker laid out its vision — underscoring that its commitments would be legally binding. The company has promised to complete AstraZeneca's research and development hub in Cambridge and to establish the new company's tax residence in England.

The maker of Viagra has also written to Prime Minister David Cameron to offer commitments, but the debate has become politically fraught. The opposition Labour Party has accused Cameron of being a cheerleader for the deal.

The potential deal comes amid a spate of mergers among pharmaceutical companies, who are seeking to find new ways to grow as generic drugmakers move in to make cheaper versions of products with expiring patents.

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