Pfizer under fire in Europe, U.S. as it weighs next Astra move

Fri May 9, 2014 8:28am EDT
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By Ben Hirschler

LONDON (Reuters) - U.S. drugmaker Pfizer (PFE.N: Quote) is under fire on both sides of the Atlantic as it weighs its next move to buy British rival AstraZeneca (AZN.L: Quote), which could be a sweetened offer next week.

A strategic question for Pfizer and its advisers is whether to come back with a new bid before bosses from both companies are grilled by UK lawmakers on May 13-14, or wait until the end of the week.

Two people familiar with the matter said on Friday it would be more "polite" for Pfizer to explain its current position to the two parliamentary committees before pushing out a new offer.

The New York-based company's record of slashing jobs after a string of earlier mergers has provoked a political backlash against the proposed $106 billion takeover at home and in Britain, with two U.S. state governors joining the fray on Thursday.

Maryland Governor Martin O'Malley and Delaware Governor Jack Markell wrote to Pfizer Chief Executive Officer Ian Read "expressing deep concerns" about the planned deal, given the fact that AstraZeneca employs 5,700 people in the two states.

Many in the United States fear Pfizer's promise to Britain that the combined company would keep 20 percent of its research and development workforce in the country will inevitably jeopardize American jobs.

It is the same fear that agitates politicians in Sweden, where Prime Minister Fredrik Reinfeldt said his country had already had "negative experiences" with Pfizer after it failed to honor promises on jobs following its 2002 acquisition of Pharmacia.

In Britain, however, there are concerns that Pfizer's vows leave too much room for it to renege on its promises, and Prime Minister David Cameron, who initially welcomed Pfizer's "robust" assurances, now wants more commitments.   Continued...

A man walks past Pfizer's world headquarters in New York April 28, 2014. REUTERS/Andrew Kelly