Pfizer and AstraZeneca

Baroness Neville-Rolfe Excerpts

Tuesday 6th May 2014 Lords Chamber

[Lord Popat]

My Lords, as I said earlier, as yet there is no formal bid for this merger. The relevant government department is looking into a number of things, including public health and the supply of medicines to the NHS by AstraZeneca. We will have to wait and see what developments take place over the next few weeks on this merger.

[Baroness Neville-Rolfe (Con)]

My Lords, I was glad to hear the Minister say that the Government would do whatever was best in the UK public interest in this case. I was disappointed that the Cadbury merger was not fully scrutinised or blocked, and concerned about a succession of takeovers by utility companies, which ensured that they are now owned from Germany or France and that the UK interest is not always preserved. What powers do the Government or the EU have to ensure adequate scrutiny of this important merger, and how will they ensure the observance of any promises on jobs or R&D?

[Lord Popat]

The noble Baroness makes a very important point. The law already backs boards that feel that a takeover would be against the long-term interests of their company. Directors must have regard to the likely long-term consequences of their decisions. With regard to foreign takeovers, the code was amended to make it explicit that directors are not required to consider the offer price as a determining factor when deciding whether to recommend a bid. They can take full account of the bidders’ plan which, since 2011, has also had to be set out in more detail.

Quite often takeovers or mergers are looked at on a case-by-case basis. Cadbury Schweppes was a classic example of a large takeover. Although there is a limitation on what the Government can do under present legislation, the party opposite, when it was in government, had the opportunity to make the necessary changes. It did not happen, and the Cadbury Schweppes takeover went very smoothly. We are very concerned to make sure that the interests of British research and development and British exports are taken into account if any such merger or takeover takes place.