Loud opposition to Pfizer's AstraZeneca takeover prompts Parliamentary probe

Labour party leader Ed Miliband

Britain's Parliament has summoned executives of Pfizer ($PFE) and AstraZeneca ($AZN) to a hearing, during which they will be grilled about their proposed merger, which has sparked broad opposition among Brits concerned about preserving jobs and R&D operations. The Parliament's business select committee could call the hearing within the next week, according to the BBC, and the science and technology committee is planning a separate meeting with the companies.

Political opposition to the deal is heating up, as Pfizer weighs its response to AstraZeneca's latest rejection. On Friday, AZ refused Pfizer's sweetened-up $106 billion takeover bid; under U.K. takeover rules, Pfizer has until May 26 to come back with a new bid. In the meantime, some British politicians are doing everything they can to discourage the deal, which would be the largest-ever foreign takeover of a U.K.-based company.

On Sunday, Labour party leader Ed Miliband accused Prime Minister David Cameron of being a "cheerleader" for Pfizer and called for an inquiry into the deal. "We need a proper, independent assessment of whether this [deal] is in our national interest," Miliband told the BBC. Andrew Miller, chair of the Parliament's science and technology committee, echoed Miliband's concerns, expressing a need for more information about how the deal will influence science and intellectual property in the U.K.

The proposal for such an assessment, which Miliband calls a "public interest test," has also generated some support from AstraZeneca investors. Among those who agree with Miliband are Martin Gilbert, chief executive of Aberdeen Asset Management, one of AstraZeneca's 10 largest investors, according to The Telegraph.

Pfizer CEO Ian Read

Last week, Pfizer CEO Ian Read tried to calm Brits' concerns by vowing to Cameron that AstraZeneca's Cambridge factory and research center would stay open and 20% of the combined company's R&D staff would be employed in Britain. Miliband called the assurances "pretty weak" and expressed doubt that any other country would be "waving this bid through," according to the Financial Times. Miliband added that Pfizer's "dubious" record in the U.K. includes its partial closure of an R&D center in Kent two years ago.

Miliband has written to Cameron proposing that the U.K. government take a much more active role in this proposed acquisition and any others that might arise in the future, according to the FT. Major takeovers "have failed to deliver the promised benefits," Miliband said. "In this particular bid the stakes could not be much higher."

- here's the BBC story
- read more at The Telegraph
- here's the FT's take (reg. req.)

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