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MPs begin probe into Pfizer proposed AstraZeneca takeover Pfizer chief defends track record after criticism from MPs
(35 minutes later)
MPs have begun investigating Pfizer's proposed bid for AstraZeneca, with executives and politicians facing tough questioning over the next two days. Pfizer's chief executive has fended off tough criticism from MPs, saying the drugs giant has acted with "integrity" and that complaints are based on a misunderstanding of the facts.
The Commons Business Committee kicked off proceedings and will hear from Pfizer chief executive Ian Read later. Ian Read was being questioned over the US firm's proposed £63bn-plus takeover of the UK's AstraZeneca.
Union leaders told the hearing that a takeover should be blocked because Pfizer's promise to protect UK jobs and investment could not be guaranteed. The Business Committee is taking evidence and will hear later from Business Secretary Vince Cable.
Politicians and scientists have warned a takeover could damage UK interests.Politicians and scientists have warned a takeover could damage UK interests.
Ahead of the committee's hearing, the President of the Royal Society, Prof Sir Paul Nurse, told the BBC that Pfizer's five-year commitment to maintain research and jobs was "vague" and insufficient. Mr Read rejected criticism that Pfizer had a poor track record on maintaining job and investments, both in the UK and elsewhere.
Adrian Bailey, chairman of the committee, asked Mr Read to respond to claims that Pfizer was like a "praying mantis" and a "shark that needs feeding".
Mr Read said he was "very proud" of his 35 years at the firm, describing it as a "company of high integrity focused on patients and delivering drugs to patients".
He said he was not concerned about an attack on the company by Swedish Prime Minister Fredrik Reinfeldt, who referred to "negative experiences" after Pfizer took over Pharmacia.
Mr Read said the comments were based on a "misunderstanding of the facts" over strategy and a promise to build a factory only if a product got regulatory approval. "Having set the facts right, I'm not concerned" by the comments, he said.
He added, however, that a merged Pfizer-Astra would mean research expenditure would be lower than that of the two separate companies.
Mr Read said that one of the drivers of his proposed deal was to increase efficiency in order to keep both firms competitive in an increasingly tough marketplace.
Earlier at the hearing, union leaders said that a takeover should be blocked because Pfizer's promise to protect UK jobs and investment could not be guaranteed.
Tony Burke, assistant general secretary of Unite, said he had met shop stewards and they were against a takeover. "They are concerned that not only would they face job losses, but that skills and scientific expertise would be dissipated," Mr Burke said.
Allan Black, national officer at the GMB, said Pfizer's track record on maintaining job after takeovers was not good. "I tend to treat employers on what they do, rather than what they say," he said.
'Not long enough'
Before the committee hearing, the President of the Royal Society, Prof Sir Paul Nurse, told the BBC that Pfizer's five-year commitment to maintain research and jobs was "vague" and insufficient.
Sir Paul, who has submitted written evidence to the committee, said: "Research is a long-term business. I have researched for 40 years of my life. I know that five years is not long enough term to be committed to.Sir Paul, who has submitted written evidence to the committee, said: "Research is a long-term business. I have researched for 40 years of my life. I know that five years is not long enough term to be committed to.
"They need to look at a 10-year horizon at least if they are actually going to make an important impact on this area and produce the medicines that will help people.""They need to look at a 10-year horizon at least if they are actually going to make an important impact on this area and produce the medicines that will help people."
Meanwhile, the chairman of the Business Committee, Adrian Bailey, said he would want to know from Pfizer how legally binding were its commitments on UK jobs and investment. Pfizer chief defends track record
"Pfizer has a history of buying businesses and then closing them down," he said.
He said it might be necessary to amend the Takeover Code - before any acquisition of AstraZeneca - to ensure that the government could intervene if any commitments were broken.
Pfizer, he said, had spoken a lot about the tax advantages of the acquisition. "The last thing that we want to do is start adding to their tax pile without any benefits to the country," he said.
Track record
Representatives from the Unite and GMB unions were the first to give evidence to the committee. Tony Burke, assistant general secretary of Unite, said both unions had met their shop stewards and they were against a takeover.
"They are concerned that, not only would they face job losses, but that skills and scientific expertise would be dissipated," Mr Burke said.
Allan Black, national officer at the GMB, said Pfizer's track record on maintaining job after takeovers was not good. "I tend to treat employers on what they do, rather than what they say," he said.
Later on Tuesday, the committee will take evidence from Business Secretary Vince Cable.
On Wednesday, the Science Select Committee will also take evidence, including from Mr Read.
'Strong rationale''Strong rationale'
On Tuesday, Pfizer turned up the pressure on AstraZeneca by outlining its takeover proposals to Astra's shareholders.On Tuesday, Pfizer turned up the pressure on AstraZeneca by outlining its takeover proposals to Astra's shareholders.
Pfizer laid out the "strong strategic rationale" of the £63bn takeover plan.Pfizer laid out the "strong strategic rationale" of the £63bn takeover plan.
Astra has so far proved resistant to Pfizer's overtures, rejecting its latest offer as "inadequate".Astra has so far proved resistant to Pfizer's overtures, rejecting its latest offer as "inadequate".
Any deal would be the largest-ever foreign takeover of a UK, but the proposal has revived memories of when US food giant Kraft abandoned jobs pledges after it bought Cadbury. Any deal would be the largest foreign takeover of a UK firm to date, but the proposal has revived memories of when US food giant Kraft abandoned jobs pledges after it bought Cadbury.