Lord Sainsbury has asked the government to prevent AstraZeneca from being sold and “dismembered” by proposed buyer, US pharmaceutical company Pfizer. After failing in an initial takeover attempt, Pfizer is expected to return with an improved offer valuing the British firm at £67 billion, but Lord Sainsbury has expressed fears that the move will lead to an important British company being ripped apart.
“I am not in favour of the takeover of excellent and strategically important British companies by failing foreign companies whose actions are fuelled by tax avoidance, and who want to asset-strip the intellectual property of the British company and then dismember it,” Sainsbury wrote in the Guardian.
Following AstraZeneca’s previous boss Sir David Barnes’ description of Pfizer as a “praying mantis” that “sucks the lifeblood out of their prey”, former captain of industry Sainsbury warned David Cameron that the takeover would be politically damaging, affecting UK jobs and investment. Experts suspect Pfizer will save millions of pounds in American corporate taxes through owning AstraZeneca, and Pfizer’s Scottish boss Ian Read has already suggested that AstraZeneca would be broken up and its assets put into Pfizer’s three divisions – one or more of which could be sold off.
“This would involve the closure of many of [AstraZeneca's] operations, a substantial reduction of its R&D and would be a devastating blow to the UK presence in the pharmaceutical industry,” warned Sainsbury, a scion of the retail dynasty and current chancellor of Cambridge University.
Investors, however, are betting that terms will be agreed. “One way or another, I think the deal will go ahead,” said Beaufort Securities sales trader Basil Petrides.
More than 6,700 people in the UK are employed by AstraZeneca, supported by an R&D budget of £2.8bn. Pfizer says it will keep at least 20% of the combined company’s R&D workforce in the UK for at least five years. Despite deputy prime minister Nick Clegg stating he wants greater assurances from Pfizer, Sainsbury argued that any promises that are not legally binding are a “total waste of time”, adding: “If [the prime minister] lets AstraZeneca fall into the hands of Pfizer, many people will not forgive him – and will use the ballot box to make their feelings known.”
Image of Lord Sainsbury courtesy of the Wikimedia Commons, via Wikipedia