Drugs giant Pfizer has disclosed details of a £59bn 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.
Pfizer admitted it hopes to slash its tax bill as part of the deal, which would see it re-domiciled in Britain.
But Ian Read, chief executive of the Viagra maker, said there were no guarantees for manufacturing jobs staying in the country as he set out details of the approach to Astra.
Scottish-born Read said it would mean one of the biggest pharmaceutical companies in the world being based in the UK.
He also said such an offer would represent a 100bn US dollar (£59bn) windfall for the economy - with the proposal to Astra’s shareholders comprising a significant cash sum as well as shares in the new firm.
But Pfizer said that under its proposal the new company would retain its head office in New York and be listed on Wall Street. Read said it was driven by Astra being a good fit for the company, combining to produce efficiencies and delivering earnings growth, opportunities in key drug areas and enhanced presence in developing markets.
Patients would also benefit through the companies’ shared commitment to research and development in the fight against diseases such as cancer, it was claimed.
But Read said that the takeover could have seen Pfizer faced with paying 38% tax on earnings from Astra compared with 21% if re-domiciled in the UK.
Chief financial officer Frank D’Amelio said: “We clearly are projecting a lower tax going forward.”
Read said Pfizer had “reached out” to the Government 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 he said he could not make any firm commitment about keeping manufacturing in Britain or the future of the new research centre being developed by Astra in Cambridge.
However he added: “We do see the UK as an attractive place to do science and manufacturing. We do believe the UK Government has created the right incentives.”