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Pfizer’s already beaten Ed Miliband. Now it just needs to offer the right price

6 May 2014

6 May 2014

Pfizer will almost certainly have to offer more than its second bid of £50 a share for rival drug giant AstraZeneca, but the American predator seems to be winning the game of spin so far. For a start, Pfizer chief Ian Read turns out to be a Scottish-born graduate of Imperial College London who has spent his entire career with the company. AstraZeneca, by contrast, is run by a Frenchman, Pascal Soriot, under a Swedish chairman, Leif Johansson, both parachuted in two years ago – reminders that Astra Zeneca is already a multinational with its research facilities divided between Cheshire and Sweden and less than 15 per cent of its workforce based in the UK, and that it has recently recovered from a period of underperformance that provoked the departure of its previous top team.

Ed Miliband’s verbiage about the need for powers to block bids that threaten ‘British jobs and science’ already looks like what it is: opportunism that reveals ignorance and antipathy towards business. Read’s reassurance to David Cameron of ‘long-term commitment to the UK’ may not be worth much as the winds of globalisation blow, but the attractiveness of the UK as a tax base for what could be the world’s largest research-based pharmaceutical group is evidently a cause for celebration for George Osborne.

Former AstraZeneca chief executive Sir David Barnes has called Pfizer a ‘praying mantis’ that will ‘suck the lifeblood’ out of his old company, but a more significant voice is that of the doyen of the industry, former GlaxoSmithKline head Sir Richard Sykes, who says ‘ownership is irrelevant’ so long as there’s every encouragement for such companies to ‘do their drug discovery and development here’. In short, the game is Pfizer’s for the taking, when the price is right.

GoveThis is an extract from Martin Vander Weyer’s Any Other Business column in next week’s magazine. Click here to read for free with a trial of The Spectator app for iPad and iPhone. You can also subscribe with a free trial on the Kindle Fire.


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  • orsonhinds

    The price might well be a bigger stumbling block than pundits and sympathetic politicians believe. Fitzer might value Astrazeneca at $106Bn, an eye-watering amount indeed, but Astrazeneca, based on some optimistic medium term revenue forecasts, values itself at $222.6Bn or £105 per share.
    http://www.thepharmaletter.com/article/astrazeneca-sets-out-its-value-stall-projecting-annual-revenues-of-45-billion-by-2023
    AstraZeneca’s 2014 results – income of $6.4Bn and operating profit of $1.952Bn – seems to mean that someone, somewhere is being somewhat delusional.
    http://www.astrazeneca.com/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline%3B+filename%3DPress-release.pdf&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1285670353391&ssbinary=true

  • McRobbie

    Milie chosen another bandwagon and as always he’s missed the main point..business must be efficient and successful or die…we no longer have lantern men walking in front of horseless carriages.

    • rtj1211

      And Pfizer is so efficient that it’s stockpiled cash and got no research pipeline.

      That’s like saying you made a fortune selling radioactivity and zapped your cojones along the way before you had kids.

      Fine role model for children you’d be having done that………

  • EarlPChandler

    Cameron of ‘long-term commitment to the UK’ may not be worth much as the winds of globalisation blow, but the attractiveness of the UK as a tax base for what could be the world’s largest research-based pharmaceutical group is evidently a cause for celebration for George Osborne. http://num.to/74-76-50-48-44-50

  • Gaby_C

    Preying mantis?

  • Matthew 88

    Richard Sykes’ article in the today’s FT was spot on about this. The only thing that matters is whether or not the jobs are domiciled in the UK not whether a “British” (or rather Anglo-Swedish) firm owned by lots of international institutions is sold to an “American” firm owned by lots of international institutions. How very characteristic of the BBC that it should headline Sir David Barnes’ comments but ignore those of Richard Sykes.

    • you_kid

      There is a reason for AstraZeneca effectively closing shop in Alderley. Car wash businesses however are thriving due to the labour profile in the English periphery.

    • rtj1211

      No it’s not. It’s about whether those jobs exist in the UK or not.

      I”m sure you will be awarded an A* in your corporate finance/M+A MBA module if you suggest that the first casualty of this merger won’t be 5000 jobs. Course, you have to describe this as ‘synergies’, as the term ‘redundancy’ is a P45 offence in investment analysis………

    • McRobbie

      I was somewhat amused when one of the swedish ministers condemned the UK for not opposing the sale of the anglo swedish firm to an anglo american firm.

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