LONDON -- The head of U.S. drugs giant Pfizer (IW 500/22) admitted Tuesday that jobs could be lost if it succeeds in taking over British competitor AstraZeneca (IW 1000/157) in a $106 billion deal.
Pfizer CEO Ian Read also told a British parliamentary committee that the combined total of $12 billion currently spent by the two pharmaceuticals firms on research and development would fall.
AstraZeneca's CEO meanwhile warned the same committee that a takeover could delay the development of new drugs.
Politicians and unions have expressed concern that a takeover would lead to job cuts and damage Britain's position as a research and development hub.
Pressed repeatedly on what savings Viagra maker Pfizer was planning to make in the event of a takeover, Read admitted "there will be some job cuts somewhere."
"I'm not sitting here saying that we can become more efficient without some reduction in jobs. We'll be more efficient by some reduction in jobs," Read told the committee. "What I can't tell you is how much or how many or where."
AstraZeneca employs 6,700 people in Britain.
So far, AstraZeneca has rejected Pfizer's advances, arguing the terms of the offer -- increased from a previous informal bid of $99 billion -- has "substantially" undervalued the company.
Unions in Britain want the government to block any takeover.
On the eve of the hearing, Pfizer appealed directly to AstraZeneca shareholders, setting out the "strong strategic rationale" for the takeover.
Turning up the heat, Pfizer said Tuesday that it was willing to alter the terms and structure of its cash-and-shares takeover bid, pitched at £50 per AstraZeneca share, in order to win approval from management.
Last week, Pfizer faced political pressure in the United States over the potential impact of the takeover.
The governors of Maryland and Delaware pressed Pfizer on Friday about the impact on jobs in their states, citing the lack of assurances.
And U.S. Senator Ron Wyden called for an overhaul of the tax code to discourage deals like Pfizer is pursuing, which would allow the new company to avoid paying billions of dollars in U.S. taxes.
Copyright Agence France-Presse 2014
