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Merger madness rarely pays off, so why do firms still make these deals?

124678

Comments

  • cepheus
    cepheus Posts: 20,053 Forumite
    edited 13 May 2014 at 6:59AM
    antrobus wrote: »
    Why, what's wrong with "foreigners"? Isn't it a bit xenophobic to be concerned about foreign takeovers? Complaining about the foreign ownership of British companies sounds a bit UKIP to me.

    Oh look, here's a source!
    http://www.ukipdaily.com/british-brands-foreign-hands/#.U3FGUyj4TTo

    It's hypocritical to restrict the movement of Labour but not capital across borders. Unrestricted and unregulated movement of both is of course a free-market view which I have issues with anyway. There is only one over-riding issue and that is not the movement of anything, but acting what best for society as a whole rather than a small elite, which will vary from case to case. For example, there may well be a good moral case for restricting labour movement due to it's effect on draining the skills of the 'donating' country. Note that point is never raised in UKIP literature, which might help them take a moral line, they know their voters aren't bothered because they are too selfish. It's always what's best for me, me me. Sums up the Tories and UKIP in a sentence.
  • Jennifer_Jane
    Jennifer_Jane Posts: 3,237 Forumite
    1,000 Posts Combo Breaker
    edited 13 May 2014 at 10:13AM
    I work for AZ in Alderley Park. Can't tell you how worried I am right now, there's nothing worse than complete uncertainty. Only bought a house last year :-(





    Yes, I feel for you, martin. Having worked for 45 years, I don't think there was any time that I wasn't concerned about how safe my job was. I hope you have PPI on your mortgage, at least (and I'm not being flippant).


    How are the Swedes faring? Seems to me that they are in a worse position, as surely the Astra link would disappear completely?


    Having worked for Zeneca and then AZ (so went through the difficult synergy programme then, and again in the great culls of 2008/9 etc), I know that there was little security in a Company which should have taken steps to go into niche pharma a lot sooner. Medimmune was bought too expensively, and the lack of pipeline and patent expiries were discussed by the Board 20 years ago, and ex-VPs (SET) have said that they should have done something about it a long time ago. AZ is just far too monolithic - you will recognise the "spaghetti" decision-making model I previously mentioned, with too many e-mails, and more, too many meetings - unless it's changed radically.


    It's hard for the employees, working in a large company in a small area, and if jobs are lost in this area, it will probably also impact on my house sale (just saying in case you feel I don't understand what you are going through). I'm not in Macclesfield, but in close enough range.


    If you are in research, however, I would say that your future at AZ in Cheshire was not safe anyway. If you are in Operations, then a lot of that had been global, and many of those factories were closed, and manufacturing sent to China and India.


    I hope that you are OK, I wonder what the shareholders will vote for.


    Will you let us know? I'm sure many people would be interested in the personal story. I feel for the Swedes too.
  • IronWolf
    IronWolf Posts: 6,445 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    cepheus wrote: »
    I would have hoped to hear something about the loss to the UKs technical base and jobs which such a takeover might entail. Are you happy to see the UK reduced to a second class nation? It's quite shocking to hear this discussion revolving around what's best for small second hand owners which is all what most individual shareholders are.



    http://www.bbc.co.uk/news/business-27374068

    The US seems more worried about job losses than the UK and quite rightly so. Pfizer want to move to the UK to take advantage of our low taxes.

    And what is so great about the UK R&D workforce? As I see it they haven't come out with a blockbuster drug for a decade and have survived merely by modifying existing drugs enough to get a new patent like they did with Nexium - which is just an isolated isomer of omeprazole.

    Astra's UK R&D clearly have been producing nothing which is why the pipeline is rubbish.
    Faith, hope, charity, these three; but the greatest of these is charity.
  • antrobus
    antrobus Posts: 17,386 Forumite
    cepheus wrote: »
    It's hypocritical to restrict the movement of Labour but not capital across borders. ....

    That's the very point I was making.

    At least UKIP are adopting a stance that is intellectually consistent. You on the other hand appear to be arguing that seeking to place restrictions on foreigners coming to live in this country is somehow morally reprehensible, but that seeking to place restrictions on foreigners owning assets in this country is perfectly OK.
    cepheus wrote: »
    ...For example, there may well be a good moral case for restricting labour movement due to it's effect on draining the skills of the 'donating' country. ....

    And therefore there may well be a good moral case for restricting labour movement due to it's effect on the donee country. Unless that is, you are arguing that different moral standards are to be applied to different countries.
  • cepheus
    cepheus Posts: 20,053 Forumite
    Top scientist: Pfizer bid 'flimsy'Pfizer and AstraZeneca logos
    Pfizer's commitments to maintain research and jobs should it take over AstraZeneca have been dismissed as "vague"

    http://www.bbc.co.uk/news/health-27382927
  • tincans
    tincans Posts: 124 Forumite
    Generali wrote: »
    I don't see where the tax dodge is.

    The recipient of the new shares can sell easily enough. The market for shares in Astra Pfizer or whatever should be extremely liquid.


    Really ?

    There is a huge benefit from Pfizer moving their domicile from USA to UK in tax terms.

    This may be the fault of the US tax system and the way it treats overseas earnings.

    US corporation tax is 35% , the UK will drop to 20% in 2 years time plus they will have the benefit of the 10% 'patent box' rate.

    The driver for this merger is mainly tax arbitrage.
  • cepheus
    cepheus Posts: 20,053 Forumite
    antrobus wrote: »
    That's the very point I was making.

    At least UKIP are adopting a stance that is intellectually consistent.

    nonsense, see my post and stop quoting bits of it.
  • cepheus
    cepheus Posts: 20,053 Forumite
    tincans wrote: »
    Really ?

    There is a huge benefit from Pfizer moving their domicile from USA to UK in tax terms.

    This may be the fault of the US tax system and the way it treats overseas earnings.

    US corporation tax is 35% , the UK will drop to 20% in 2 years time plus they will have the benefit of the 10% 'patent box' rate.

    The driver for this merger is mainly tax arbitrage.

    Read this
    Some 85 Pfizer companies are registered in the US state of Delaware, a highly controversial tax shelter. It also has dozens of businesses registered in the Netherlands, Ireland and Luxembourgs.

    In total, 185 of its 468 subsidiary companies are based in low-tax areas.

    The group has an estimated £43bn nestled away in havens – a sum tax experts expect to grow by £6bn a year.

    Tax accountant Richard Murphy said: ‘It has accumulated £43bn in tax havens across the world, and that doesn’t happen by accident. Its profits from everywhere outside the US end up in low-tax jurisdictions and there is no doubt that the same would happen if it acquired AstraZeneca.’
  • antrobus
    antrobus Posts: 17,386 Forumite
    edited 13 May 2014 at 12:07PM
    cepheus wrote: »
    nonsense, see my post and stop quoting bits of it.

    Why?
    cepheus wrote: »
    It's hypocritical to restrict the movement of Labour but not capital across borders. ...

    That's the very point I was making.

    At least UKIP are adopting a stance that is intellectually consistent. You on the other hand appear to be arguing that seeking to place restrictions on foreigners coming to live in this country is somehow morally reprehensible, but that seeking to place restrictions on foreigners owning assets in this country is perfectly OK.
    cepheus wrote: »
    ...Unrestricted and unregulated movement of both is of course a free-market view which I have issues with anyway. There is only one over-riding issue and that is not the movement of anything, but acting what best for society as a whole rather than a small elite, which will vary from case to case. For example, there may well be a good moral case for restricting labour movement due to it's effect on draining the skills of the 'donating' country....

    And therefore there may well be a good moral case for restricting labour movement due to its effect on the donee country. Unless that is, you are arguing that different moral standards are to be applied to different countries.
    cepheus wrote: »
    ..Note that point is never raised in UKIP literature, which might help them take a moral line, they know their voters aren't bothered because they are too selfish. It's always what's best for me, me me. Sums up the Tories and UKIP in a sentence.

    There is that any better? I've quoted your whole post, but made it clear what specific points I'm addressing.
  • ruggedtoast
    ruggedtoast Posts: 9,819 Forumite
    Pfizer big cheese admits to MPs that jobs will be lost.

    http://www.telegraph.co.uk/finance/newsbysector/pharmaceuticalsandchemicals/10827168/Pfizer-boss-Jobs-will-be-lost-in-AstraZeneca-takeover.html

    Pfizer arent prepared to make binding guarantees that there will be no job losses. I'm interested what Parliament will do now. They were doubtless expecting and hoping for the empty promises that Kraft delivered which would have allowed them to rubber stamp the deal.

    Pfizer have now put them in the position of looking weak and venal, or actually standing up to stop a foreign take over of a British company.

    My money is on weak and venal.
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