By Andrew Ward, Elizabeth Rigby and Miles Johnson in London
Pfizer will cut its research budget and global headcount if it succeeds in taking over AstraZeneca, the US drugs maker acknowledged yesterday, amid mounting expectations that it will raise the informal £63bn offer for its UK rival.
Ian Read, Pfizer chief executive and chairman, refused to rule out job cuts in the UK as he was pressed by British lawmakers about his plans for the country’s second-biggest pharmaceuticals company.
Mr Read had been summoned to London for two days of parliamentary hearings, as public debate over the implications of the proposed deal for the UK’s life sciences sector intensified.
The tone for the 81-minute grilling was set when Adrian Bailey, chairman of the business committee, noted that Pfizer had been called a “praying mantis” and “a shark that needs feeding”.
UK politicians, led by David Cameron, the prime minister, say firmer guarantees on jobs and investment are needed to win their blessing for any deal. Vince Cable, the business secretary, is investigating what legal options the UK would have to frustrate the bid should their demands not be met.
Mr Read reiterated his commitment to keep 20 per cent of the combined research workforce in Britain for at least five years but refused to go further on specific job commitments.
The chief executive told MPs that his company’s pledge to commit a fifth of its R&D spending to the UK was an “unprecedented” and “substantial” commitment.
But he admitted that an enlarged company would whittle back its employee numbers and overall R&D budget should the deal go ahead.
Mr Read’s refusal to make further concessions on jobs dismayed MPs. The Pfizer boss said he could not offer those undertakings without first talking to AstraZeneca, which was refusing to discuss a deal.
MPs expressed scepticism over Pfizer’s commitments to the UK science base. Mr Read insisted he could be trusted. “I am a man of my word,” he told MPs. “I’m very careful about making specific commitments because when we make them we keep them.”
Meanwhile, people close to the companies say they expect Pfizer to raise its £63bn cash and share offer before the May 26 deadline, by when, under UK rules, they have to make a firm bid or walk away for six months.
The proposed deal is facing growing political headwinds with concerns on both sides of the Atlantic about jobs and controversy over Pfizer’s plans to move its tax domicile to Britain to escape higher US tax rates.
Mr Read downplayed the political risks on Capitol Hill after Democratic senators raised the alarm over tax plans.
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