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Pfizer's proposed bid for AstraZeneca

If you are looking for expert comment on Pfizer's proposed bid for AstraZeneca Warwick Business School Assistant Professor of Strategy Hossam Zeitoun researches corporate governance and has followed the case.

Dr Hossam Zeitoun said: "History has shown that contracts are not very effective in protecting jobs and research facilities in the long term. Contracts usually have contingencies and clauses attached to them, so that if circumstances change they are not legally binding.

"It is unlikely that those concerned by the takeover in the UK will be re-assured by this commitment from Pfizer. Also, a five-year contract is a relatively short time, especially in the pharmaceutical industry.

"Under UK takeover rules, a party that makes any public statement during an offer period about its intentions will be required to adhere to it 'unless there has been a material change of circumstances'.

"There have been high profile cases in the past where companies have gone back on commitments. Kraft made promises on jobs when it took over Cadbury, but circumstances changed and Kraft closed one of Cadbury’s factories with the loss of many jobs.

"Nokia made similar commitments in Germany when it received subsidies from the state, but it abandoned the manufacturing facilities after the committed time period, which led to widespread condemnation.

"But in UK law there is not much the Government can do to block such a takeover, unless it endangers the narrowly defined public interest. Although Labour has promised to change this, it will all be over before the general election."

To arrange an interview with Dr Zaitoun, please call Ashley Potter, +44 (0)24 7657 3967, +44 (0)7733 013264,