MPs have quizzed Vince Cable on how he can be sure promises given by Pfizer would be kept if the company takes over AstraZeneca.
Politicians fearful of the outcome of any deal bombarded the Business Secretary in the Commons yesterday with queries about his powers to intervene and to seek assurances.
Pfizer offered £63 billion for the UK pharmaceutical giant on Friday. If the deal went ahead, it would be the biggest takeover in UK corporate history.
Labour MP Pat McFadden said: “How do you know, and how can you assure, Pfizer will keep their promises with regard to R&D (research and development) and the British science bases if this takeover goes through?”
Mr Cable said: “Should this proceed – and we haven’t yet had a formal bid – obviously it is a matter for negotiation… but clearly there will be negotiations to make sure any obligation is binding.
“I’m sure Pfizer themselves would want to ensure any obligations are clear and binding.”
Labour’s Kevin Brennan urged Mr Cable to spell out how he would make commitments legally binding. He said: “I and our civil servants are devoting a lot of thought to that question.”
Katy Clark, Labour MP for North Ayrshire and Arran, asked if Mr Cable would change the law if he needed to.
She said: “Should you come to the view it is not in the UK’s strategic economic interest for this takeover to go ahead and you believe the existing legislation is inadequate, will you bring forward legislation to try to stop the takeover taking place?”
Mr Cable replied: “I am trying to keep options as wide as possible. I’ve also suggested because of the European framework in which these are embedded, it is rather difficult to do that.”
Conservative MP Crispin Blunt said Pfizer was a “model corporate citizen”. He added: “It [the takeover] gives us the possibility of hosting the world’s leading pharmaceutical company in the United Kingdom.”
Mr Cable said: “I’m sure it is a vote of confidence but equally I’m sure the companies are motivated by hard-headed commercial considerations and we should be motivated by hard-headed considerations of the national interest.”
Labour’s Angela Smith asked why civil servants had been tasked with negotiations on the deal, describing it as “completely unprecedented”.
But Mr Cable said: “This is a very bizarre criticism. The Prime Minister, the Deputy Prime Minister, the Chancellor, myself, the science and universities minister, have all been involved. Of course the government has civil servants to carry out its instructions. I’m baffled as to why you regard that as a problem.”
Conservative Nadhim Zahawi said: “AstraZeneca claim there are a number of gems within the company which could have undervalued the business. Of course, valuations are up to the shareholders but there is an R&D and future jobs prospect within those gems in the portfolio. What conversations have you had about those new products and what would happen to those in the future?”
Mr Cable said: “As this proceeds, if it does, we will need to have detailed discussions with both companies about the specifics … I recognise there is a lot of detail yet to be confronted.”
Labour MP Steve McCabe highlighted that shareholders would sell if offered an appropriate price. He said: “There is very little any government can do about that.”
Mr Cable said: “Of course, that is the mechanics of a takeover in the market.”