Government has power to block Astra buyout
Britain could use its public interest powers to intervene in US drug maker Pfizer's $106 billion (R1.114 trillion) takeover bid for its pharmaceutical company AstraZeneca, Business Secretary Vince Cable told parliament on Tuesday.
"One of our options as the government would be to consider using our public interest test powers. This would be a serious step and not one that would be taken lightly, but I'm open minded."
British law allows takeovers to be blocked if they are held to damage the national interest, but only in some industries.
"We are alive to the national interest considerations. We see the future of the UK as a knowledge economy, not a tax haven," he said, referring to critics who say the deal may be designed to reduce Pfizer's tax bill. "Our focus is on what is best for the UK: securing great British science, research and manufacturing jobs and decision making in the life sciences sector."
Just a year before a parliamentary election, Pfizer's bid has ratcheted up pressure on Prime Minister David Cameron, exposed divisions in his coalition government and drawn criticism from the opposition Labour Party, which has implored the government to ensure British jobs are safe.
Pfizer's offer, although rejected by AstraZeneca, dominated Britain's politics on Tuesday, stoking a wider public debate about whether it should allow foreigners, albeit from a key ally, to buy up one of the champions of its economy.
"I have a great concern that they will act like a praying mantis and suck the lifeblood out of their prey," David Barnes, who ran AstraZeneca in the 1990s.
The possible deal also drew attention elsewhere in Europe. Said Swedish Finance Minister Anders Borg after a similar deal in 2002: "The experience when Pfizer took over Pharmacia was that they made some strong commitments to research presence in Sweden. We can only come to the conclusion they scaled down and focused on cost reduction."
Cable said the government must remain neutral on the takeover and that it was a matter for shareholders. "I would rule out intervention on protectionist grounds. But I am not ruling out intervention."
He previously said that he was considering all options, including reviewing the terms under which the public interest test could be applied.
Labour Party leader Ed Miliband asked Cameron to make a substantive assessment of any takeover and called on the government to allow a stronger public interest test for takeovers.
Cameron's spokesman told reporters that the deal was a commercial matter for shareholders and that the government would continue to speak to both companies about the importance of research, skills and expanding the workforce's skills. - Reuters