As the May 26 deadline for Pfizer ($PFE) to sweeten its $106 billion offer for AstraZeneca ($AZN) draws closer, a bevy of Swedish officials are now echoing the British government's concern that the deal will be bad for European business. In an editorial in the Wall Street Journal, three Swedish ministers urged AstraZeneca shareholders to reject the deal, stating that it would threaten the job security of the 5,900 company employees who work in Sweden and diminish the country's status as a life sciences research hub.
The "Astra" in AstraZeneca was based in Sweden before the merger with the U.K.'s Zeneca 15 years ago. AstraZeneca still maintains a research facility near the Swedish city of Gothenburg. "AstraZeneca's Gothenburg center for medical research is important not only for Sweden, but also for Europe's position in the field of life science," says the editorial, which was written by Anders Borg, Sweden's minister of finance, Annie Lööf, minister for enterprise, and Jan Björklund, minister for education and research.
They aren't the only Swedish bigwigs who are speaking out against the deal. Prime Minister Fredrik Reinfeldt and opposition leader Stefan Löfven have also expressed concerns about the merger's potentially negative impact on jobs. Löfven told the Financial Times that he was aware of Pfizer's promises to maintain its R&D centers for 5 years but that he felt such promises were worth "nothing," especially considering it can take up to 20 years to develop a new drug. Löfven, who's widely expected to be the next prime minister of Sweden, has vowed to strengthen the country's life sciences industry, according to the FT.
The Swedish backlash against Pfizer's bid for AstraZeneca is the latest in a war of words that has reached epic proportions this week. One Labour Party politician called Pfizer's execs "rapists" in a tweet. On Tuesday, AstraZeneca CEO Pascal Soriot suggested a Pfizer buyout would disrupt his company's ability to save the lives of cancer patients with a breakthrough drug. And Labour Party leader Ed Miliband called Pfizer's promises about preserving jobs and R&D "worthless."
In their WSJ editorial, the three Swedish ministers are a bit more polite, but sober in their analysis of what might happen if the deal is consummated. They point out that before Pfizer bought Pharmacia in 2003, there were 4,000 Pharmacia employees working in Sweden. Today that number stands at just 500. "It is natural for companies in a market economy to try to streamline and rationalize costs," they wrote. "But these figures suggest that Pfizer's business model includes relatively promptly staff cuts in the companies it acquires."