Dallas, Texas 05/09/2014 (FINANCIALSTRENDS) – Pfizer Inc. (NYSE:PFE)’s potentially raised bid for AstraZeneca plc (ADR) (NYSE:AZN) would force Pfizer to generate over $2 billion in annual savings from the deal and job cuts could certainly be a potential option. AstraZeneca is the U.K.’s second-biggest drug maker and Pfizer has pledged to U.K. Prime Minister David Cameron to keep R&D jobs of 2,000 AstraZeneca employees in U.K. “safe from cuts” if a deal gets finalized. These triggers cost savings strategies to affect R&D jobs in Sweden and the U.S. as well as the global commercial infrastructure.
European Concerns:
Swedish Prime Minister Fredrik Reinfeldt rose concerned over Swedish jobs at AstraZeneca if the U.S. business rival Pfizer Inc. (NYSE:PFE) succeeds in acquiring it. Reinfeldt referred to Pfizer’s 2002 acquisition of Pharmacia and negative experiences despite the promises to consider jobs and operations in Sweden. AstraZeneca houses more than 10% of its global workforce at Sweden, employing over 5,900 employees out of 51,500 globally.
AstraZeneca plc (ADR) (NYSE:AZN) was created through a merger between Sweden’s Astra and Britain’s Zeneca in 1999.
Britain’s biggest medical research foundation, Wellcome Trust also reported to have “major concerns” over Pfizer-Astra Deal. The trust raised doubts about the U.S. drug giant’s commitment to investment in Britain while referring to significance of AstraZeneca to Britain’s science base.
Sir William Castell, Chairman of Wellcome Trust was quoted saying, “Pfizer’s past acquisitions of major pharmaceutical companies have led to a substantial reduction in R&D activity, which we are concerned could be replicated in this instance,” by the British newspaper.
Domestic Concerns:
AstraZeneca employs around 2,600 people in Delaware and about 3,100 people in Maryland. The governors of both these states sent a letter to Chief Executive Officer of Pfizer Inc. (NYSE:PFE), Ian Read “expressing deep concerns” about its bid to acquire U.K. based drug maker. The governors questioned the impact of the deal on jobs in Delaware and Maryland as well as Pfizer’s intentions to relocate its corporate base to the U.K. to save on the federal taxes.
Yesterday, the stock of Pfizer Inc. closed at $29.17, gaining 0.52% from its previous close.