Labour to ‘protect British science’ after Pfizer ends AstraZeneca bid

Published on Tuesday, 27 May 2014 11:13
Written by Daniel Mason

Labour has pledged to introduce a strengthened public interest test to protect the British science industry from hostile foreign takeovers.

The promise came after American drugs giant Pfizer ended its pursuit of the UK pharmaceutical firm AstraZeneca. The US company's £55 a share, £69bn bid for its rival had been criticised by opponents as a potential risk to Britain's science base and as being motivated by attempts to cut the firm's tax bill.

In a statement yesterday Pfizer said that, following AstraZeneca's rejection of the offer, it did not intend to make a further bid before last night's deadline. Under the rules for takeovers of public companies, the US firm must now wait six months before making a fresh attempt unless invited by AstraZeneca.

In a statement, Labour's shadow business secretary Chuka Umunna accused David Cameron of "cheerleading" for the bid and said a future Labour government would "act to introduce a strengthened public interest test to better protect Britain's science base in these exceptional cases".

"We were clear from the start that we would judge the proposed deal on whether it was best for British science, jobs and industry," he said.

"We were not confident this was the case which was why we said the government should subject the deal to a public interest test to determine whether it would have a material adverse impact on the UK's science and R&D base and, if so, we argued it should be blocked."

He added: ""Britain has benefited enormously from inward investment. We must remain resolutely open for business as an attractive destination for investment - not as a global tax-avoidance wheeze - but because of the positive benefits Britain offers innovative companies and the benefits those companies can bring to the British people."

The government had insisted it was neutral on the issue and that it was a matter for the shareholders of the two firms.

Meanwhile AstraZeneca's chairman Leif Johansson said it would "continue building on the momentum we have already demonstrated as an independent company".

He said: "We have attractive growth prospects and a rapidly progressing pipeline. In the coming months we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business."

Labour's call for a stronger public interest test was supported by the trade union Unite. Its assistant general secretary, Tony Burke, said: "Pfizer failed to convince hardly anyone that their bid was good for science and would secure skilled jobs and manufacturing in the UK.

"There can be no room for complacency though. We expect that there will be renewed pressure on shareholders over the coming months with the likelihood that Pfizer could be back in its attempts to takeover AstraZeneca.

"The government needs to use this time to intervene and put a public interest test in place for proposed takeovers of this size, just as other government's do, such as the French which has strengthened its powers to act to protect strategic industries."

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