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Senators urge tough U.S. review of Pfizer-AstraZeneca plan

May 15, 2014

By Ros Krasny, Diane Bartz, Sandra Maler and Peter Cooney

WASHINGTON (Reuters) – Six U.S. senators have asked antitrust regulators to take a hard look at Pfizer Inc’s plan to buy rival AstraZeneca PLC if the two companies are able to reach a deal, saying they had “significant concerns” about the proposed transaction’s effect on consumers.

AstraZeneca, formed in 1999 from the merger of Sweden’s Astra and Britain’s Zeneca, has rejected a $106 billion offer from U.S. drugmaker Pfizer, but Pfizer has not given up and a possible deal has raised concerns in both countries about the effect on research and jobs.

“Should a merger or acquisition ultimately be accepted by AstraZeneca, whether under the terms of that offer or any subsequent offer, we want to bring to your attention our significant concerns with the potentially harmful impact to consumers that would result,” the senators said in a letter.

The lawmakers, all Democrats, criticized Pfizer for saying it wanted to merge with AstraZeneca to create a UK holding company with a UK tax domicile, while maintaining its operational headquarters in New York.

“We view with skepticism any pro-competitive justification offered in support of this acquisition in light of Pfizer’s stated motivation for the transaction – avoidance of U.S. taxation,” the lawmakers said.

The senators said Pfizer had a history of reducing research and development spending after acquiring other companies, and expressed concern about lost jobs.

“Pfizer’s record of reducing efforts to innovate and bring new products to market following prior acquisitions is plain,” the senators wrote to the top officials of the Department of Justice and the Federal Trade Commission.

The two agencies share the job of enforcing antitrust law.

The letter was signed by Senators Richard Blumenthal of Connecticut, Sherrod Brown of Ohio, Chris Coons of Delaware, Dick Durbin of Illinois, Mazie Hirono of Hawaii and Sheldon Whitehouse of Rhode Island.

There was no immediate comment from Pfizer.

(Reporting by Ros Krasny and Diane Bartz; Editing by Sandra Maler and Peter Cooney)

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