The completion of the Pfizer takeover of Allergan for €151bn will benefit the Irish Government greatly, with the deal to see Pfizer bring €620m to the Irish economy in corporate tax.
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This move is said to be that Allergan will be technically buying Pfizer to transfer the tax address of the newly merged company to Dublin in the Irish Republic – a country with lower tax cost.
In what would be the biggest inversion ever, New York-based Pfizer could save hundreds of millions in USA taxes annually because it would move its tax headquarters to Ireland, where Allergan is based. “We can not delay in cracking down on inversions that erode our tax base”, said the ex-U.S. secretary of state and former NY senator in a statement.
Asian stocks were mixed Tuesday morning after USA indexes slipped Monday, dragged down in part by questions over the Pfizer-Allergan merger.
Pfizer shareholders will receive one share of the combined company for each Pfizer share and will be eligible to receive at least some of their shares in cash.
“The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people the world over”, Pfizer chief executive Ian Read said in a statement later. The Pfizer-Allergan deal drew such criticism amid the ongoing debate about higher drug prices.
The deal comes some 18 months after the failure of Read’s initial attempt at an inversion, a $118 billion bid to acquire Britain-based AstraZeneca Plc that ran into staunch opposition from that company’s management and United Kingdom politicians.
The board of the new company is expected to have 15 directors – all of Pfizer’s eleven current directors and four current directors of Allergan.
The second biggest merger deal in the history of merger deals was announced overnight in the USA, in what might be the ultimate baby boomer transaction. “We do”, said Fergal O’Brien, head of policy at employers group IBEC. The deal caps a remarkable consolidation wave roiling the USA health care industry and creates the world’s biggest drugmaker by sales. Read will serve as the chairman and CEO of the combined company, while Allergan chief executive officer Brent Saunders will serve as its president and chief operating officer.
Pfizer shareholders will receive one share of the combined company for each Pfizer share and will be eligible to receive at least some of their shares in cash.
The deal must win approval of both European and USA regulators before it can be completed. “While we understand the rationale for an “inversion” deal for Pfizer (and its eventual splitting into two companies), we think the rationale for Allergan is less compelling”.
Allergan’s shares were down 1.7 percent in premarket trading, while Pfizer’s were down 2.1 percent. Pfizer, with revenue of $49.6 billion past year, employs 78,300 worldwide.
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Lawmakers trying to fund a fresh round of highway construction with proceeds from revamped global tax rules this year started their detailed talks too late, Mr. Delaney said in an interview Monday, and the whole effort got set aside when the House spent October finding a new speaker.
