By William James
LONDON (Reuters) - Pfizer's
London-based AstraZeneca has rejected a $106 billion offer from Pfizer and expressed concern that Pfizer would shut down important research to save costs should the two merge. But it has also said it would have to consider an offer if the price was right, and Pfizer has said it could up its offer.
Over two days of parliamentary questioning, Pfizer Chief Executive Ian Read defended his five-year commitment to complete AstraZeneca's research center in Cambridge, retain a factory in the northwestern English town of Macclesfield and put a fifth of its research staff in Britain if the deal goes ahead.
But he also said he expected the group's combined research and development spending to fall, and declined to give further commitments about how many jobs might ultimately be lost if the merger went ahead.
Andrew Miller, the chairman of parliament's science committee, which questioned executives from both firms on Wednesday, said he was not satisfied with Pfizer's promises or convinced of government's ability to enforce them.
"The national stake in the proposed transaction with Pfizer is unusually high: any threat to AstraZeneca's research capacity must, to an extent, be considered a threat to UK science," Miller said in a letter to Science Minister David Willetts.
"Whether or not the government is able to hold Pfizer to these promises - and we are not yet confident it can - further, longer-term guarantees need to be obtained before we can be confident of Pfizer's commitment to the UK."
Miller said that five-year commitments were of limited value in an industry that "measures progress by decades rather than years".
The government has been talking to both firms about the deal and Prime Minister David Cameron has said he is pushing for more assurances. Business Secretary Vince Cable said on Tuesday the Pfizer commitments were a starting point for negotiations and that he was seeking "meaningful and binding" pledges.
Pfizer's Read said on Tuesday that the group's commitments were legally binding.
The government has said it has options to subject any deal to a public interest test, but any such move would involve changes to existing laws and a final decision could rest with the European Union.
(Editing by Ben Hirschler and Sophie Walker)