AstraZeneca scraps $558 mn UK investment plans citing cut in govt support

AstraZeneca on Friday scrapped plans to invest 450 million pounds ($558.3 million) in its vaccine manufacturing plant in northern England, citing a cut in British government support. 

The decision to ditch the development of an existing facility in the Speke area of Liverpool comes at a time when Prime Minister Keir Starmer is pushing hard to drum up investment in Britain to generate economic growth. 

"Following discussions with the current government, we are no longer pursuing our planned investment at Speke," a spokesperson for the London-listed bluechip drugmaker said in a statement. 

"Several factors have influenced this decision, including the timing and reduction of the final offer compared to the previous government's proposal." 

Earlier this week finance minister Rachel Reeves named AstraZeneca as one of the "great companies" she said were delivering jobs and investment across the country. 

Her speech, focused on how to get the country's stagnant economy growing again, set out the importance of attracting investment and said the government was "determined to make Britain the best place in the world to invest". 

The spokesperson for AstraZeneca, which also plans to spend 200 million pounds to expand its existing Cambridge presence, said the Liverpool site would continue to produce flu vaccines. 

Over the past year, the company has set out billions of dollars worth of investment in various countries, from Singapore and Thailand to France and Canada. 

The most notable among those was the Anglo-Swedish drugmaker's $2 billion spending proposal on research and development and manufacturing plants in the United States. 

Britain's finance ministry said a change in "the make-up" of the investment originally proposed by AstraZeneca had led to a reduced government grant offer being made. 

"All government grant funding has to demonstrate value for the taxpayer and unfortunately, despite extensive work from government officials, it has not been possible to achieve a solution," a government spokesperson said. 

The Financial Times reported in August 2024 that AstraZeneca had warned it could relocate its vaccine manufacturing site from Britain to the United States as talks with the Labour government over state aid had become deadlocked. 

The newspaper said Reeves wanted to reduce state provisions to the company's vaccine centre, which would cut the pledge made by the previous administration from about 90 million pounds to 40 million pounds. 

The previous government's offer included up to 70 million in grants to develop the facility in Speke, the FT report said.   

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)