FORTUNE — Pfizer
is preparing to win over British lawmakers in its quest to acquire AstraZeneca
The U.S. drug giant has provided documentation to two U.K. parliamentary committees in advance of CEO Ian Read’s presentation Tuesday and Wednesday on the company’s $106 billion takeover offer.
Read, who will be joined by AstraZeneca CEO Pascal Soriot, is looking to satisfy U.K. lawmakers’ demands that Pfizer will secure local jobs and research facilities.
Pfizer said its five-year commitments to the U.K., which Read outlined in a letter to officials, are “legally binding,” reported the Wall Street Journal. This is the first time the company has commented on the legality of such statements, saying that amendments to the U.K. Takeover Code in 2011 hold companies to what they say in a bid agreement and provide the basis for court enforcement.
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The U.S.-based drugmaker has committed to maintaining 20% of its workforce in the U.K., locating an innovation hub in Cambridge, and placing at least two AstraZeneca representatives on the combined company’s board.
“We recognized that our approach may create uncertainty for the U.K. government and scientific community,” Read wrote in his letter to lawmakers. “We would therefore like to assure the government of our long term commitment to the UK where Pfizer already employs a significant number of colleagues.”
While such promises have been made to British lawmakers, their U.S. counterparts are concerned that no such commitments have been offered to secure jobs in states like Delaware and Maryland, which have large concentrations of AstraZeneca employees. Those states have about 2,600 and 3,100 AstraZeneca employees respectively.
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“The company is making very specific commitments to policymakers in the United Kingdom about jobs over there,” Governor Jack Markell of Delaware, told CNBC Monday. “And we’re not hearing any of those commitments here in the United States and that’s of significant concern to us.”
Pfizer’s bid for the U.K.-based pharmaceutical rival may be rooted in tax-savings. Last year, Pfizer paid an effective tax rate of about 27% compared to about 21% for AstraZeneca, reported Bloomberg News.
If Pfizer can swap for the lower tax rate and eliminate $3 billion in costs, the combined company’s earnings per share could rise by as much as 14% three years after completing the deal, Mark Clark, a London-based analyst for Deutsche Bank told Bloomberg. That is even before any sales potential from AstraZeneca’s drug pipeline is taken into account, which the company estimates will be about $23 billion within a decade.
“It doesn’t work financially on most people’s calculations without the tax benefit,” Clark said. “Without a doubt, tax is a major motivation.”