UK's Cameron says making good progress on Pfizer guarantees

LONDON (REUTERS) - British Prime Minister David Cameron said on Sunday he had made very good progress in securing guarantees from Pfizer over the US drugmaker's US$106 billion (S$132 billion) bid to buy AstraZeneca.

Pfizer's pursuit of Britain's second-largest drugmaker has sparked a political storm in Britain, with the government initially accused of acting as cheerleader for what would be the country's largest foreign takeover.

With the opposition Labour party leading the complaints, Cameron is now seeking to protect jobs and scientific research while also sending the message that Britain remains open to investment from foreign companies. "I think the right thing to do is to engage," Cameron told BBC Television. "To get stuck in with these companies, as I've done and my team of ministers has done, to make sure we get good guarantees and the best deal for Britain. We've made some very good progress." Pfizer has already given a five-year commitment to complete AstraZeneca's new research centre 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 the U.S. firm has also said it could adjust those promises if circumstances change "significantly", prompting demands for more watertight pledges. "Don't underestimate the power of some of the things they have already said, about making sure, for instance, that 20 per cent of their R&D jobs will be here in the UK," Cameron said."Now I want more." Pfizer on Saturday sought to fight back against the mounting criticism, saying Britain's expertise in research was a key reason for the deal. Chief Executive Ian Read will take that message with him when he appears before two panels of British lawmakers this week to face questions over the takeover.

Pfizer is widely expected to come back with a sweetened offer for AstraZeneca this week, though people familiar with the matter said it was likely to wait until after the select committee hearings on May 13 and 14.

The British group has rejected successive approaches from its larger American rival, and Chief Executive Pascal Soriot has been on a roadshow with advisers to meet leading investors and lay out his strategy for a prosperous independent future.

Soriot has secured the backing of several high-profile shareholders, but others have told Reuters they would like him to engage with Pfizer if the U.S. group makes an improved offer.

Under British takeover rules, Pfizer has until May 26 to make a firm bid for AstraZeneca or walk away.

Though the government has only limited legal power to block any merger, Cameron said his business secretary Vince Cable was examining the issue of a public interest test and would report back to parliament to give his findings.

But the Prime Minister, head of the free-market Conservative Party, noted that Britain did not want to be seen to be pulling up the drawbridge to foreign companies and said AstraZeneca had itself benefited from buying foreign companies.