Pfizer boss claims 'win-win' deal
The boss of US drug giant Pfizer has said the firm's proposed takeover of British-based AstraZeneca is a "win-win for society".
Pfizer chairman and chief executive Ian Read said the £60-billion-plus deal would "liberate the balance sheet and tax" of both companies after Prime Minister David Cameron insisted the American firm must provide more assurances about its commitment to Britain.
AstraZeneca has so far resisted approaches from its rival, but Pfizer executives have not given up hope of completing a deal - potentially the biggest foreign takeover of a British company.
Fears have been raised that resulting cost-cutting could cause the loss of thousands of highly-skilled jobs and undermine the UK's science base.
In a series of videos posted on Pfizer's website, Mr Read, who is due to be grilled by two House of Commons' committees next week, said the proposed takeover was motivated by "three components of value", including combining some of the companies' products and improving efficiency.
"Governments are all around the world pressurising the industry to produce products of higher value and with more productivity, at lower cost," he said.
"So one way of doing that is to consolidate and is to take out overlapping functions."
One of the components of value is "the fact that it will liberate the balance sheet and tax of the combined companies", Mr Read said.
"That will allow us to have great cash flow and together be a stronger company, and together be able to invest in research, and in development, and with the scientific community," he added.
"I think both companies have strategies that are aimed at growing and aimed at meeting patients' needs.
"I believe that by combining these two companies we strengthen those possibilities. We strengthen the ability to bring products to patients. We strengthen the financial aspects of the company.
"We can invest in science. I see this as a win-win for society, a win-win for shareholders, and a win-win for stakeholders."
Mr Read said he believed the cultures of Pfizer and AstraZeneca were "very complimentary".
"When we looked at AZ, we liked their science," he said.
"We liked where their science is being done, which is in the UK, and we know we have good science in the UK in the Cambridge, Oxford, London and other universities.
"So we liked the science, we liked the complementary nature of the portfolio, and frankly you know, as far as we know, we believe the cultures are very complementary."
Mr Cameron told the Commons this week that Pfizer's assurances - including retaining at least 20% of the combined companies' research and development workforce in the UK for at least five years and basing its European HQ in Britain - were "encouraging", but he said he was "not satisfied" with them and wanted the firm to do more.
Mr Read and AstraZeneca chief executive Pascal Soriot will be questioned by the Business, Innovation and Skills Committee on Tuesday morning, before returning to the House of Commons on Wednesday to be quizzed by MPs on the Science and Technology Committee.
The science committee will also question Science Minister David Willetts about the Government's position.
George Osborne said Pfizer had made assurances about its plans for jobs and science in the UK and he would take a "hard-nosed" approach to any deal.
The Chancellor told BBC Radio 4's Today programme: "We have to make sure those are real promises that we can hold them to."
He added: "I'm also, on the specifics, prepared to get in the room and have a hard negotiation with very large companies and be very, very hard-nosed about what we want to deliver in terms of good British science and good British jobs."
Mr Osborne said it would be "extraordinary" not to have engaged with Pfizer and said it was a "massive error of judgment" by Labour leader Ed Miliband not to talk to the company.
He said: "My only interest in the potential bid that Pfizer might make for AstraZeneca is securing good British jobs and good British science and that is how I will judge any commercial arrangement. That is the public interest in this matter.
"Britain is an open economy. We have benefited enormously from foreign companies like Tata coming in and turning around our car industry or Nissan creating its cars in the north east of England.
"So, AstraZeneca itself, of course, is a British company that grew by taking over foreign companies."
He added: "The tax system we have created is there to attract real jobs and investment and when it comes to pharmaceuticals we have this thing called a patent box, in other words, you only get the low tax rates if you are actually generating real intellectual activity in the UK and economic benefits off it."
Shadow business secretary Chuka Umunna said: " The assurances Pfizer has given ministers are not worth the paper they are written on, given that Pfizer has since refused to rule out breaking up the AstraZeneca business and selling off parts of it in the future if this takeover proceeds.
"The Government could act immediately to work to put in place a stronger public interest test encompassing cases with an impact on strategic elements of our science base and seek a proper, independent assessment of the potential takeover as Labour has called for. Instead, ministers have sat on their hands."