News of AstraZeneca employees striking has given rise tospeculation the drug giant is setting itself up as an M&A target.
Earlier this week, the GMB union announced that staff at theAnglo-Swedish company would stage a series of strikes in September in a rowover pensions. According to GMB national officer Allan Black, this is possiblythe first time in “living memory” that employees of a pharma company have votedfor strike action. According to AstraZeneca, 165 out of the 469 GMB union members in the company's UK workforce voted for industrial action. The company has about 9,000 employees in the UK.
The dispute, which started in January, arises from thecompany’s “draconian” proposals to end its defined benefit (final salary)pension scheme for 2,500 staff based mainly at Macclesfield, the second largestsite worldwide for the company. The defined benefit scheme allegedly has adeficit of £1.4 billion.
In an interview with PharmaTimes, Black called AstraZeneca’smove both “inexplicable and unacceptable”, speculating the company was settingitself up as an M&A target.
“Strike action for pharma is very uncommon and particularlyfor AstraZeneca, which is generally a very good employer and receives very fewcriticisms. This makes this [pension move] all the more inexplicable andunacceptable… particularly as AstraZeneca hasn’t been that affected by therecession.”
According to January’s full year financial report, revenueincreased 7% to $32,804 million last year, with core operating profit up 23% to$13,621 million.
The only logical reason the firm would want to wipe thedeficit off the pension sheet was if it was anticipating to sell or merge,Black told PharmaTimes. “But that’s purely speculation,” he added.
However, various analysts have recently tipped AstraZenecaas a possible takeover target, particularly in light of the company havingraised its earnings forecast several times of late. In July, GlaxoSmithKlineboss Andrew Witty publicly ruled out any bid for its rival saying: “That kind of classic merger is nothow we will grow. Any deal would have to be one where we don’t pay a 30pcpremium just to fire people.”
Blacksaid it was unlikely the strike would be averted, though the union was willingto discuss the issue with management.
In astatement, AstraZeneca said it was “very disappointed” by the decision tostrike, adding: “It is our firm belief that industrial action would not be inanyone’s best interests”.
“AstraZenecaremains committed to providing a very competitive level of pension benefit, andthe changes made ensure all employees continue to have access to pensionarrangements that compare favorably to other organisations in the UK.”
AstraZeneca head of UK corporate communications Simon Moore told PharmaTimes the industrial action would not affect patients accessing their medicines. "I can confirm we have robust contingency plans in place and do not expect there to be an impact on medicines supply," he said.
The datesfor strike action are: three strikes of two hours duration on 8 September;three strikes of four hours duration on 15 September; and one day/shift ofstrike action for 24 hours starting at 6am on 22 September. Further action willbe announced in due course.