Pfizer a tax risk, warns AstraZeneca chief executive

by Calum Fuller

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16 May 2014

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THE US PHARMACEUTICAL seeking to acquire UK rival AstraZeneca represents a tax avoidance risk, according to the UK druggist's chief executive Pascal Soriot.

Pfizer, which has proposed a £63bn takeover of the UK business, intends to use the AstraZeneca deal to relocate its tax base to the UK in a move designed to see it unfettered by the US 35% corporation tax rate and take advantage of Britain's kinder 20% levy.

Soriot told The Guardian: "The risk is that if it turns into a controversy our own company would be impacted by it. Even if we were to agree a [takeover] deal, it takes eight to ten months to close it.

"If this controversy leads to a delay, you have to remember the shareholders of Pfizer can still vote no. Imagine we go through this entire process of waiting, a lot of anxiety in our employees' minds, lots of distraction, potential controversy surrounding us and in the end the deal doesn't happen and we are left flailing in the wind."

Soriot also hit back at Pfizer's pledge to ringfence work on important medicines and criticised the US group's plan to split the combined business into three separate divisions.

"It's all very well to say we will ringfence, but what does it mean, ‘ringfencing'? You have to understand precisely how you would do that. The model where you would split the company in three pieces I don't think would work at all for our business."

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