By Danica Kirka
LONDON -- Britain's leader sought Sunday to deflect criticism that he's been working too closely with U.S. drugmaker Pfizer (PFE - Get Report) in its proposed $106 billion takeover of the Anglo-Swedish firm AstraZeneca (AZN - Get Report).
With fears growing that British jobs will be lost and the nation's science base undermined in the potential merger, Prime Minister David Cameron denied in a BBC interview that he was favoring the American company. When asked on The Andrew Marr Show whether he was engaging more closely with Pfizer, Cameron insisted that wasn't the case.
"Ministers were talking to AstraZeneca before anyone spoke to Pfizer," he said.Pfizer has made three offers for AstraZeneca since January -- all of which have been rejected. AstraZeneca said Pfizer's latest offer of $106 billion in cash and stock undervalues the company, and that a takeover would disrupt its work on a potentially lucrative pipeline of new drugs. The proposed deal would be the largest foreign takeover of a British company, and Cameron has faced political pressure from the opposition Labor Party to ensure the deal is in the public interest. But Cameron says that while he wants to examine this deal, he doesn't believe Britain should "put up the drawbridge" to outside investment. "Britain benefits massively by being an economy open to overseas investment," he said. Pfizer has said it would move its official domicile -- but not its corporate offices -- to London. That would reduce Pfizer's income tax rate, because U.S. rates are considerably higher than in the United Kingdom. The American company has also made a series of promises to Cameron, pledging in a letter to keep at least 20% of the combined company's research and development staff in the U.K. The commitments will be scrutinized this week, when Pfizer CEO Ian Read faces lawmakers on the House of Commons Science and Technology Committee for a hearing on the potential deal, which comes amid a spate of mergers and acquisitions in the pharmaceutical industry.
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