NEW YORK (TheStreet) -- Chuka Umunna, the Labour MP from Streatham, U.K., and the Shadow Business Secretary, is an angry man.
What's got him riled is American pharma giant Pfizer's (PFE) transatlantic bid to acquire British drugmaker AstraZeneca (AZN) in a mammoth $106 billion deal. Umunna has attacked Pfizer's track record in acquisitions as "intellectual asset-stripping" exercises.
Mega-mergers and acquisitions are always saddled with controversy from the day matters become public, and Pfizer's bid to press ahead with the deal despite twice being turned down by its target has set the business world abuzz.
Playing out side-by-side is a political battle between the Conservative-led David Cameron government, which is batting for the deal, and the Labour Party, which sees the loss of U.K. jobs due to the acquisition as a rallying call for action.The Liberal Democrats, as has increasingly become their lot, are sandwiched somewhere in between, their hearts probably with Labour but mindful of the fact that their own Vince Cable is in the hot seat as the Business Secretary. Speaking of being sandwiched: Pfizer did its P.R. folks no favors when, in 2011, in a much-criticized move, it shut down its leading R&D center in Sandwich, in the U.K. county of Kent. The company employed 2,400 people at the site and a thriving local economy had mushroomed around the facility. Tax experts point to another motivation for Pfizer to be looking toward the island nation. If the merger were to go through, Pfizer could make Britain its reporting location for tax purposes, saving a neat $1 billion in taxes. This move to navigate away from U.S. taxes has also upset a few lawmakers on Capitol Hill. Proposals under consideration in the Senate as well as in Obama's 2015 budget would ban such practices by U.S. companies. No wonder Pfizer wants this deal to go through A.S.A.P. Pfizer's version of its pursuit of AstraZeneca reads very differently from this talk, though. The company line is that the merger would create the largest pharma company in the world, and it would have greater and faster access to new markets, as well as a global research base. Aware that such pronouncements are standard fare in such deals, Pfizer has indicated a willingness to protect jobs at AstraZeneca. The trouble is, the way private companies work, it is next to impossible to guarantee such a thing. Umunna, as reported by the more provocative sections of the British media, called these assurances "not worth the paper they are written on."
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