New Treasury rules derail record US$160b Pfizer-Allergan merger
Print Edition
THE biggest US-based drugmaker, Pfizer Inc, will stay put thanks to aggressive new Treasury Department rules that succeeded in blocking Pfizer from acquiring rival Allergan and moving to Ireland — on paper — to reduce its tax bill.
As analysts and investors had expected, the two companies called off the record US$160 billion merger yesterday “by mutual agreement.” Pfizer cited Treasury’s new regulations, issued on Monday, to make such “tax inversions” less lucrative.
The merger would have moved Pfizer’s address — but not its operations or headquarters — to Ireland, where it would pay far less in corporate taxes.
Pfizer, based in New York, has agreed to pay Dublin-based Allergan Plc US$150 million for reimbursement of expenses.
Now the two drugmakers will focus on other strategies to boost profits and sales quickly, with Pfizer saying it will decide by year’s end whether to separate its global established products business, which sells older, mostly off-patent drugs.
Pfizer has endured years of relentless pressure from analysts and others to break up the company so growth and profits could accelerate. That’s easier said than done, given Pfizer’s huge scale, increasing pressure from insurers for bigger discounts and a revenue base that’s been declining over the last several years as multiple blockbusters such as cholesterol drug Lipitor have lost billions in annual sales to much cheaper generic copycats.
“We remain focused on continuing to enhance the value of our innovative and established businesses,” Pfizer CEO Ian Read said in a statement.
“We believe our late-stage pipeline has several attractive commercial opportunities with high potential across several therapeutic areas,” Read added. “We also maintain the financial strength and flexibility to pursue attractive business development and other shareholder-friendly capital allocation opportunities.”
Allergan’s CEO Brent Saunders said in a statement that his company is “disappointed that the Pfizer transaction” won’t happen, adding that “Allergan is poised to deliver strong, sustainable growth.”
“Allergan is focused on delivering growth from an efficient operating structure while also being committed to investing in R&D,” Saunders said.
Meanwhile, Allergan is still aiming to sell its generic drug business for US$40 billion to Israel’s Teva Pharmacueticals Industries Ltd.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
