Cable 'open-minded' over Pfizer bid
4:12am Tuesday 6th May 2014 in © Press Association 2014
Business Secretary Vince Cable has said he will not rule out intervening in any formal bid by US pharmaceutical giant Pfizer to takeover AstraZeneca but insisted the Government is taking an neutral approach.
The Liberal Democrat told MPs he is "open-minded" about applying a public interest test and is "very alive to the national interest considerations" but the bid is "ultimately a matter for shareholders".
It comes after MPs announced they are to question senior executives from Pfizer over its £63 billion offer for the UK-based firm.
The Business, Innovation and Skills Committee will also question officials from AstraZeneca, which has so far rejected the overtures. The committee is likely to seek assurances from the US firm about job security if the takeover goes ahead.
Unions have called for an urgent meeting with Mr Cable to press the case for jobs, amid speculation that Pfizer could make a hostile bid.
Mr Cable told MPs: "The Government must and will approach this from the position of even-handed neutrality and recognise that this is ultimately a matter for the shareholders of both companies."
The Lib Dem said the Government was operating within the rules on takeovers introduced by the previous Labour government.
He added: "One of our options as the Government would be to consider using our public interest test powers. This would be a serious step and not one that should be taken lightly and I'm open-minded about it while stressing that we are operating in serious European legal constraints.
"We are very alive to the national interest considerations here. We see the future of the UK as a knowledge economy, not a tax haven and our focus is on what is best for the UK, securing Great British science, research and manufacturing jobs and decision-making in the life sciences sector."
Shadow business secretary Chuka Umunna claimed pledges made by Pfizer about its intentions for the future of the company were "simply not worth the paper they are written on".
He said: " Pfizer has said it is committed to making a long-term investment in the UK through this purchase. Similar assurances were given to other companies acquired by Pfizer in the US and in Sweden. Subsequently, research facilities were shut down and thousands of high-skilled jobs lost. Why should we believe the same fate would not befall AstraZeneca?
"T he assurances that the Government has extracted from Pfizer are simply not worth the paper they are written on. The main rationale for this transaction appears to be tax."
The Government can currently intervene on mergers or takeovers where there is a national security issue, an issue of media plurality, competition concerns or if it could affect financial stability.
Mr Cable told MPs: "I'm not ruling out intervention. We need to look at all the options."
Chancellor George Osborne has insisted that securing British jobs is the Government's "sole interest" and he would back "any arrangement that delivers" for the UK.
Unite assistant general secretary Tony Burke said unions had shown remarkable patience over the possible takeover "but that is now wearing thin".
Labour leader Ed Miliband has previously demanded a full assessment of the potential deal and accused Prime Minister David Cameron of acting as a "cheerleader" for it.
London mayor Boris Johnson said it was " very important to establish that Pfizer is genuinely committed to R&D in this country".
CBI director general John Cridland said: "The most important issue for British business with this proposed takeover is the strength of the UK scientific research base, of which pharma is a critical part.
"Open markets are an asset for the UK and the CBI does not support protectionism. This offer is primarily a decision for the board and shareholders of AstraZeneca.
"If a proposed takeover proceeds, it would be vital for the UK Government to receive assurances about the maintenance of research activity in the UK which sustains over time."
Roger Barker, director of corporate governance at the Institute of Directors, said: "We do not believe that there is any case for extending the existing public interest test for takeovers. However, this is not to say that government has no part to play in establishing a world-class environment for life sciences in the UK.
"It has a crucial role in ensuring that the UK's university sector remains at the leading edge of scientific research and training. It should renew its efforts to promote and nurture the financing and support of entrepreneurial and start-up activity in the sector. And it will remain instrumental in determining the fiscal and regulatory environment that will attract high-value-added research and development activities.
"But attempting to second-guess the industrial logic of takeover decisions is not one of government's strengths, as was demonstrated throughout the 1970s at British Leyland and elsewhere. Recent proposals from Lord Heseltine and Chuka Umunna to extend the public interest test would put at risk the UK's hard-won reputation as a compelling destination for inward investment from around the world.
"Over time, excessive government intervention in the market would cost far more jobs than might be saved by efforts to politicise this particular deal."