Pfizer announced 2,000 UK job cuts are it announced in 2011 that it would shut its drug research site in Sandwich, southern England, where Viagra was invented
Pfizer announced 2,000 UK job cuts are it announced in 2011 that it would shut its drug research site in Sandwich, southern England, where Viagra was inventedAFP

British politicians are planning to probe US-based Pfizer's hostile attempt to take over UK drug maker AstraZeneca in a bid to safeguard jobs and to not enable mass tax avoidance.

According to a member of the parliamentary business, innovation and skills (Bis) committee, lawmakers are looking to investigating the attempted bit as Pfizer's chief executive Ian Read attempts to court Whitehall after a series of meetings with government officials.

"We are keen to look closely at it," said Ann McKechin to Reuters.

"We will see how events pan out over the next few days, but clearly given the scale of the proposed merger it is important that we consider the impact not just on shareholders but also on employees and the wider interests of the UK.

"The committee previously had a great deal of concern over the Cadbury takeover, so I think this is one we will really have to closely analyse what is on offer."

On 29 April, Read confirmed that the US drugmaker has contacted the UK government over its massive merger bid with AstraZeneca after claiming the tie-up would boost the British economy by $100bn (£60bn, €73bn).

Although AstraZeneca has smacked down Pfizer's bid acquire the UK's second largest pharmaceutical company, on a reporter conference call the same day, Read said that the merger would lead to the creation of new drugs and will inject billions back into the economy.

Job Losses and Tax Avoidance Concerns

Read met Chancellor George Osborne, Science Minister David Willets and Cabinet Secretary Jeremy Heywood in a bid to drum up support as well as quells concerns over massive job losses.

However, chairman of the Business Select Committee, Adrian Bailey has since voiced "great concerns" over Pfizer's intentions legal tax avoidance intentions by snapping up AstraZeneca.

Bailey said MPs would discuss their plans on the probe as the potential deal "highlights the need for the Takeover Panel to look at public interest issues in determining such a deal".

AstraZeneca employs nearly 7,000 people in the UK and is the second largest pharmaceutical in Britain behind GlaxoSmithKline.

Meanwhile, Pfizer announced 2,000 UK job cuts are it announced in 2011 that it would shut its drug research site in Sandwich, southern England, where Viagra was invented.

Back in the US, politicians said the Pfizer's bid renewed concerns about the aggressive tax avoidance strategies of large companies.

While the deal is still far from reality, with the UK company yet to accept the terms, the so-called tax inversion under which the merged entity will have the UK as its tax domicile has created tensions in Washington.

"This further demonstrates the urgency for tax reform," the news agency quoted as saying a spokeswoman for Democratic Senator Ron Wyden, chairman of the tax-writing US Senate Finance Committee.

"Now is the time to undertake comprehensive reform to ensure our country stays competitive on a global stage and continues to be the best place for corporate investment."

If the deal is concluded, the US will suffer a loss of corporate revenue from Pfizer. In addition, the deal would result in a lower effective tax rate for the merged entity than that paid separately by the two companies.

In 2013, Pfizer paid total income taxes of $2.87bn to the US government, other state and foreign tax authorities, representing an effective tax rate of 27.5%.

The deal with AstraZeneca would allow Pfizer to escape the comparatively high 35% US corporate income tax rate, one of the highest in the world.