Allergan shareholders will receive 11.3 shares of the combined company for each of their shares, while Pfizer stockholders will get one share of the combined company. It said, “We will maintain our global operational headquarters in NY City”.
Advertisement
The deal is the latest – and the largest – to be aimed at helping an American company lower its taxes by reincorporating overseas, a practice known as a corporate inversion.
For its part, the Irish government is sanguine about the deal, since both pharmaceutical companies already employ thousands of people in the country.
The transaction will expand Pfizer’s offerings, which will include additions like Allergan’s Botox and Kythera’s Kybella.
The acquisition would move the headquarters of Pfizer to Ireland making it the biggest tax inversion ever.
“Although the Pfizer/Allergan deal appears to have been consummated and is attractive to both sides, the U.S. regulatory reaction to this very high profile merger remains an unknown and may very well be negative due to the size of the tax inversion”, Jacobs wrote in an email.
Generic drugs It is in the process of selling the generic drugs business on which it had focused previously to Teva, a transaction that is scheduled to close in the first quarter of next year.
Trump wants to bring down the corporate tax rate to 15% from the current 35% and make corporations pay a one-time 10% tax on their foreign profits to bring them back into the U.S. In the last GOP presidential debate on Fox News, Trump boasted that he has been praised for his 10% stance.
Sanders, Clinton’s chief rival for the Democratic presidential nomination, said in a statement released by his congressional office that the deal would be “a disaster for American consumers” and went further than Clinton, suggesting that the Obama administration “has the authority to stop this merger, and it should exercise that authority”.
“Allergan has a sales staff that deals with their specific products, and Pfizer has its staff for different products”.
Martin O’Malley, the third and trailing Democratic candidate hopped on the anti-inversion bandwagon as well, calling the merger “fundamentally unfair, and a prime example of how our capitalist economy is not supposed to work”.
The combination – the second-largest merger in history – could have ramifications around the globe, pushing up drug prices and spurring more such deals in the fast-consolidating health care sector and other fields.
Pfizer Inc. Chairman and CEO Ian Read will serve in the same roles with the combined company while Allergan Plc. leader Brent Saunders will become president and chief operating officer. “We can not delay in cracking down on inversions that erode our tax base”, said the ex-US secretary of state and former NY senator in a statement.
“Through this combination, Pfizer will have greater financial flexibility”, said Read. But the drugmaker will combine with Botox-maker Allergan as a company that will be called Pfizer Plc.
Advertisement
Pfizer executives said they were confident the deal would not flout United States rules discouraging so-called inversions, including new measures announced last week by the Treasury department.
