AstraZeneca Takeover: MPs Question Bosses

Unions have warned MPs any takeover of AstraZeneca by US drugs giant Pfizer would lead to job losses and damage scientific skills in Britain.

Speaking at a hearing of the Business, Innovation and Skills Committee on Pfizer's £63bn approach to the British-based firm, Tony Burke, of the union Unite, said the firm had a terrible track record on job losses.

He told MPs the US-based pharmaceutical company had cut 65,000 jobs globally since 2005 and that when Pfizer had closed down a UK site, in Sandwich, it had been difficult for workers to get agreement on consultations.

Mr Burke said that there had been a meeting at which staff at AstraZeneca had voice significant concern about their jobs. The firm employs 6,700 in the UK.

He said that of particular concern was the research and development area where Pfizer had made significant cuts, while AstraZeneca has shown greater commitment.

Allan Black of the GMB union questioned Pfizer's suggestions of a five or 10-year legally binding guarantee of commitment to research and jobs and said he felt the drugs company would be unlikely to sign such a document.

Pfizer claims the newly created giant will mean improved treatments

Pfizer's chief executive Ian Read, who will be questioned later today, wrote to David Cameron giving a guarantee 20% of research jobs would stay in the UK, two AstraZeneca directors would be able to join the board and that the company would pay tax in the UK.

In a memo to the committee Mr Read said this was a legally binding guarantee for five years. However, MPs were told that under Takeover Panel rules the guarantee would only be binding for a year, any remaining time would be voluntary.

Mr Black said their was significant concern over AstraZeneca's manufacturing plant in Macclesfield because a drug made there was not widely marketed in the US and there were fears Pfizer would, therefore, not wish to invest in it.

The unions said Pfizer had not responded to requests for a meeting.

MPs are seeking cast iron guarantees on British jobs from drugs giant Pfizer if its attempted takeover of AstraZeneca is successful.

Mr Read's assurances have been dismissed as "vague" and "insufficient" by the Nobel Prize winner and President of the Royal Society Sir Paul Nurse.

He has written a letter to the committee ahead of two days of parliamentary hearings on Tuesday and Wednesday, which will see the chief executives of both firms quizzed.

Sir Paul said greater assurances were needed on the future of the British pharmaceutical industry and the jobs of scientists, and that there should be a 10-year legally binding agreement on what Pfizer would do.

The offer has revived bitter memories of when American food giant Kraft abandoned jobs pledges after buying Cadbury in 2010.

The committee's Labour chairman Adrian Bailey said Pfizer's track record of buying foreign firms and closing them down "gives no confidence that they will deliver on the assurances that we have made".

Mr Read said the new £150bn firm would be able to bring better products to patients with improved treatments for conditions such as cancer, heart disease and diabetes.

If it goes ahead then it would be the biggest ever foreign takeover of a British company.

AstraZeneca has refused to engage with the Viagra makers on the takeover and dismissed the offer as "inadequate".

Under takeover rules, having indicated its interest to shareholder, Pfizer now has until May 26 to make a formal offer, although one is widely expected later this week.

David Cameron has come under pressure from Labour to subject the takeover to a public interest test.

A public interest test is usually reserved for matters of national security or financial stability and it would be difficult to argue as these rules were not applied for takeovers of British car manufacturers.

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