LONDON – Vince Cable, the British business secretary, is calling for stricter rules to regulate acquisitions of British companies by overseas competitors.
Appearing on television on Sunday, Mr. Cable said that the British government needed to eliminate “wiggle room” when it came to commitments that foreign companies make in order to win approval to buy British companies, particularly in sectors that are considered strategically important.
“We’re talking with the Takeover Panel about how to do that and we may well get into the area of having financial penalties in order to make sure those commitments are binding,” Mr. Cable said in his appearance
Mr. Cable told the BBC that the government would move quickly to introduce legislation to tighten the takeover rules if necessary to achieve its goals.
He also gave his views on the subject in a subsequent essay he wrote for the website Liberal Democrat Voice.
“I want such commitments to be clear, unambiguous and with no wriggle room,” Mr. Cable wrote.
The move to strengthen takeover rules comes after Pfizer’s unsuccessful bid this year to acquire the British drug maker AstraZeneca.
Pfizer abandoned its bid, in which it would have paid about $119 billion, in May after AstraZeneca refused to engage in discussions. AstraZeneca said it believed the offer undervalued the company and its future prospects and expressed concern about the execution risk of such a deal.
Pfizer had hoped to engage in a so-called inversion, in which it would reincorporate overseas in order to lower its corporate taxes and free up money held in foreign subsidiaries.
Inversions have become increasingly popular, particularly for health care companies, and have prompted several mergers this year.
British politicians had expressed concern that Pfizer, the maker of best-selling drugs like Lipitor and Viagra, would eliminate jobs as part of the merger. AstraZeneca employs 51,500 people worldwide, including about 6,700 in Britain.
In hopes of winning support for its bid, Pfizer pledged to keep at least 20 percent of its combined research and development work force in Britain after the deal. It also promised to follow through on a deal to complete a research hub being built by AstraZeneca in Cambridge, England.
Under British takeover rules, Pfizer can make a renewed bid for AstraZeneca later this summer.