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4 May 2014 | Will Green
Conservative peer Lord Heseltine has raised concerns over the potential impact on UK supply chains of the potential sale of pharmaceutical firm AstraZeneca to US company Pfizer.
Speaking to the BBC, Heseltine, an advisor to the prime minister on economic growth, said the government should have greater powers to intervene when British firms were the subject of takeover bids from foreign companies.
“There are so many issues about the science base, about the supply chains, about employment prospects that ought to be explored and I don’t see any way in which this can be adequately done unless the government has reserve powers,” he said.
“It’s a question of where their headquarters are, where the decisions are taken, who determines what research is done and where, how much government money goes into supporting the science base within a cooperative arrangement, where the supply chains are going to be and what the motive is.”
Pfizer, which makes Viagra, has made two offers to purchase AstraZeneca with a mix of cash and shares, the latest of which, valuing the firm at £63 billion, was rejected on Friday.
Leif Johansson, chairman of AstraZeneca, said: “We are showing strong momentum as an independent company, in particular with our exciting, rapidly progressing pipeline, which the board believes will deliver significant value for shareholders. Pfizer’s proposal would dramatically dilute AstraZeneca shareholders’ exposure to our unique pipeline and would create risks around its delivery. As such, the board has no hesitation in rejecting the proposal.”
Ian Read, chairman and CEO of Pfizer, said: “There is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies. We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies.”
The move would allow Pfizer to take advantage of the UK’s lower corporate tax rate by moving its headquarters to Britain.
AstraZeneca employs 51,500 people worldwide and in 2012 sales totalled $25.7 billion (£15.26 billion).