Drugs giant Pfizer has disclosed details of a £59billion approach for UK rival AstraZeneca in what would be the biggest foreign takeover of a British firm.
Astra has spurned two advances from the Viagra maker since January, but the American company said it remained “confident a combination is capable of being consummated”, as it lifted the lid on the deal talks following a week of speculation.
Ian Read, chief executive of Pfizer, said there were no guarantees for manufacturing jobs staying in the country as he set out details of the approach to Astra.
Scottish-born Mr Read said it would see one of the biggest pharmaceutical companies in the world being based in the UK.
Mr Read said Pfizer had “reached out” to the government yesterday over its proposals, which it set out for the first time in a stock exchange announcement following a week of speculation that has seen the UK firm’s share price soar by a quarter.
But Pfizer first faces a major stumbling block in the shape of the AstraZeneca board, which said the initial proposal “very significantly undervalued” the company and its future prospects.
It disclosed that a proposal in January, valuing the company at £58.7billion, representing a 30% premium to the share price at the time, had been rebuffed, and that it had again been rejected when it tried to revive discussions on Friday.
Astra employs more than 50,000 people around the world, including 6,700 in the UK.
The company was formed by the merger of Sweden’s Astra and Britain’s Zeneca in 1999.
Revenues were down 6% to £15.3billion last year, reflecting the loss of exclusivity on a number of drugs it had developed as patents ran out.
Pfizer employs over 70,000 people around the world including 2,500 in the UK and 900 at its UK headquarters in Surrey.
Its revenues of £30.7billion for 2013 were also down 6% on the previous year. Labour’s shadow business secretary, Chuka Umunna, said a takeover should be judged on whether it promoted jobs and growth, protected Britain’s research and skills base and guaranteed long-term investment needed for the UK.
He said: “We want to see Britain’s research and development capabilities strengthened. This is crucial for expanding the high-skilled jobs we need to earn our way to higher living standards.
“We also want to see a long-term view taken when takeovers happen rather than an exclusive focus on the immediate returns for investors.”
Unite the union called for guarantees of no job losses and for the protection of the UK’s research and development base in the event that Pfizer succeeds in its bid.
Unite national officer Linda McCulloch said: “News of the renewed bid for AstraZeneca by Pfizer will be very worrying for the UK workforce despite AstraZeneca holding out and urging its shareholders to ignore the bid.
“AstraZeneca is strategically significant for the UK economy. We expect the UK government to pay special attention to this bid and do everything possible to protect jobs and to support the UK’s knowledge base.”