EU ‘likely to block’ UK intervention in AstraZeneca bid
Pfizer’s pursuit of British rival continues, but Cameron under pressure to protect jobs
The proposed takeover by American pharmaceutical giant Pfizer of its British rival AstraZeneca has led to the British business secretary Vince Cable addressing parliament to affirm the government’s commitment to securing British science jobs. Photograph: Christopher Furlong/Getty Images
The European Commission would probably block any attempt by the British government to intervene in Pfizer’s proposed takeover of AstraZeneca as Brussels itself would rule on a deal of that size, competition lawyers say.
AstraZeneca has rejected the $106 billion bid to create the world’s largest pharmaceuticals business. However, Pfizer is still pursuing its British rival, and political pressure is growing on prime minister David Cameron to show he can protect jobs should the New York-based company prevail.
Cameron initially signalled he would not interfere in the bid. However, the Conservative leader - who faces a parliamentary election this time next year - now says he wants further commitments from Pfizer before giving his blessing to any takeover of Britain’s second largest drugs group.
He has also not ruled out a suggestion from his business secretary Vince Cable that a takeover could be subjected to a “public interest test” - one of the few occasions when ministers can intervene in a country which prides itself on being open to foreign investment.
Any plan to invoke the public interest test on a pharmaceutical deal, however, would be likely to come up against the Commission, which allows intervention by European Union national governments only in exceptional cases.
“Politically this is big because there are lots of jobs involved and we’re getting near an election,” Anthony Woolich, a competition partner at international commerce law firm, Holman Fenwick Willan LLP, told Reuters.
“(But) I think it’s going to be very hard for the government to intervene. The whole point about the European Commission is that where you have big mergers they should be regulated centrally and individual member states should not be able to intervene except on exceptional grounds.”
Pfizer’s offer has dominated British politics this week and poses a challenge to Cameron who is often accused by critics of favouring the interests of big business over workers.
The anti-EU UK Independence Party, which is forecast to win European parliamentary elections later this month, could also seize on any involvement by Brussels to back up its argument that Britain has yielded too many powers to Europe.
Britain has been open to foreign investment since prime minister Margaret Thatcher liberalised markets in the 1980s. This is in contrast to France which in 2005 named dairy group Danone as a company of strategic importance to shield it from a feared takeover by PepsiCo.
But Westminster politicians have become wary since US group Kraft bought confectionary group Cadbury in 2010, winning support by promising to keep open a British factory only to announce its closure soon after the deal completed.