So far there is no information on how the deal will impact the new company’s agency relationships.
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The merged business will be called Pfizer Plc.
Executives emphasised the benefits of marrying the two companies’ drug portfolios and research departments and achieving about $2bn in operational savings.
Pfizer’s current tax rate is about 25% and would drop below 20% in Ireland, analysts estimate.
Representative Tom Price, one of few congressional Republicans to comment, said in a statement that more Treasury regulations will not solve the inversions problem.
Perhaps anticipating the deal would draw fire, Read sent a letter on Monday to senior senators. “The function of that has been pretty straightforward, it’s been driven by having a large chunk of capital allowances and unused tax losses in an equivalent business that we purchased”, Coveney told CNBC.
Mark Marmur, a spokesman for Actavis, which owns Allergan, said: “We don’t have any statement on potential impact to New Jersey as it is very early”.
Last year, Pfizer’s attempted takeover of AstraZeneca failed, but was at least in part motivated by tax.
As this merging will take place, we all have high hopes for the better in the drug-making industry.
Democrats heaped the most criticism on the New York-based drug maker, with Hillary Clinton accusing Pfizer of using legal loopholes to avoid its “fair share” of taxes in a deal that she said “will leave US taxpayers holding the bag”.
It was not immediately clear how many jobs would be lost as a result of the deal, which is expected to close in the second half of 2016. While the US Treasury has issued a raft of anti tax inversion legislation, analysts believe that Pfizer will successfully structure the deal to avoid those new regulations.
The Allergan acquisition will delay New York-based Pfizer’s decision on whether to sell off its lower-margin unit by two years, until late 2018, the company said.
CEO of Pfizer, Ian Read, is going to hold the position for the combined entity as well while the CEO of Allergan, Brent Saunders is going to become COO and President.
The final terms of the deal include 11.3 Pfizer shares for every Allergan share, the Journal said, citing unidentified sources. And the companies have structured the deal-with the smaller Allergan technically buying Pfizer-in order to shield it from an inversion crackdown.
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. Pfizer has about 95,000 employees, Allergan 15,000. The transaction is the biggest merger announced this year and has been approved by the boards of both companies.
The deal will see Allergan come under the Pfizer brand.
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The transaction represents more than a 30% premium based on Pfizer’s and Allergan’s unaffected share prices as of October 28, 2015.
