By Andrew Ward, Elizabeth Rigby and Sam Fleming
Influential MPs will today demand that Pfizer offer “cast iron” guarantees on British jobs and investment for up to 10 years if it buys AstraZeneca when they grill the company’s boss over its £63bn takeover approach.
Ian Read, chairman and chief executive of Pfizer, has been summoned to London for two days of parliamentary hearings, where he is expected to argue that the company will “keep our word” on jobs and that the proposal will create “a UK-based scientific powerhouse”.
But Adrian Bailey, who chairs the business committee that will quiz Mr Read today, said nothing less than “cast iron” guarantees would secure MPs’ backing for what would be the biggest foreign takeover in UK history.
Pfizer yesterday said promises in a letter to the prime minister earlier this month, including a pledge to keep 20 per cent of the merged company’s research workforce in the UK, were already legally binding.
But MPs argued that the pledges were limited to five years and included a get-out for Pfizer if “circumstances significantly change”.
“We havt/Cae been bitten once before on Krafdbury,” said Mr Bailey in a reference to US group Kraft, which abandoned job pledges it made before it bought Cadbury in 2010. “Are the caveats . . . as legally binding as the commitments? If they are, they nullify each other.”
Andrew Miller, chair of the science committee that will question Mr Read tomorrow, said Pfizer would have to offer a 10-year deal on investment and jobs and remove any qualifications to win his support.
Pfizer has said it would be hard to make further promises without first talking to AstraZeneca, which has so far refused to enter negotiations.
If Pfizer were to renege on the pledges, it could fall foul of tougher but untested UK Take-over Panel rules introduced after the Kraft-Cadbury furore. If the Panel decided a pledge had been breached it could censure Pfizer, bring a court challenge or “cold-shoulder” the group.
The latter is the ultimate sanction and would involve the Panel telling regulated firms in the City – investment banks, accountants, law firms – not to act for Pfizer on future deals.
But senior lawyers stressed that the strength of the revised rules had yet to be tested in a big deal and that Pfizer had left itself “wriggle room” in its undertakings. (FT)