By Elizabeth Rigby, Andrew Ward and George Parker in London
Pfizer will face demands for firmer guarantees on British jobs and investment when its boss is grilled by UK lawmakers today over its proposed £63bn takeover of AstraZeneca.
Ian Read, chairman and chief executive of the US pharmaceuticals company, will tell MPs that the deal would create “a UK-based scientific powerhouse” and promise to “keep our word” on jobs.
However, the two sides appeared to be in stalemate yesterday. Pfizer said its existing commitments, including a pledge to keep 20 per cent of the two companies’ combined research jobs in Britain, were already legally binding even as UK politicians made clear they were not strong enough.
Adrian Bailey, the MP who chairs the business committee that will quiz Mr Read in the first of two days of hearings, said nothing less than “cast- iron” guarantees would do. Pfizer has committed to a deal on jobs but with a get-out clause if “circumstances significantly change”.
“We have been bitten once before on Kraft/Cadbury,” said Mr Bailey, referring to US-based consumer goods company Kraft, which abandoned job pledges it made before it bought the UK’s Cadbury in 2010. “Are the caveats they have given as legally binding as the commitments? If they are, they nullify each other.”
Kraft came under heavy criticism when it pledged to keep open Cadbury’s factory near Bristol during its takeover battle only to renege on the commitment after the deal went through at a cost of 400 jobs.
Andrew Miller, chair of the science committee, said Mr Read would have to offer a 10-year deal on investment and jobs and remove any qualifications to win his support.
David Cameron, UK prime minister, has asked officials to try to make Pfizer’s assurances binding or to seek new guarantees, while government lawyers are poring over the US company’s statements to see if they can be made legally watertight.
In a statement yesterday, Pfizer said: “With our commitment to foster research and development in the UK, we are matching words with deeds.”
However, there were no new promises beyond those made in a letter to Mr Cameron this month.
Pfizer said these commitments were “tangible, legally binding and represent significant investment”.
It also promised to complete the development of AstraZeneca’s research centre in Cambridge, to maintain a substantial manufacturing presence in Macclesfield, and to locate key scientific and management functions in the UK. (FT)