Recently, Pfizer and Allergan announced plans to merge.
Advertisement
The combined company, which will be called Pfizer plc, will bring together a huge USA pharmaceutical company best known for iconic drugs like the cholesterol-fighting Lipitor and erectile dysfunction medication Viagra with Allergan, which is best known for making wrinkle-smoothing Botox.
The merger is a so-called inversion, in which US companies looking to lower their tax bills combine with a company in a country with a lower tax rate. The companies also said the transaction would lower Pfizer’s tax rate to the Irish levy of 17%-18%.
Soon after Sanders sent out his statement condemning the inversion, Hillary Clinton said that the merger would “leave USA taxpayers holding the bag”, and she called on Congress to ensure those big corporations “pay their fair share”.
Allergan shareholders will receive 11.3 shares in the new company for each of their Allergan shares.
The topic of corporate tax inversions rears its head with Pfizer announcing it will acquire Allergan for more than $150 billion and move tax base to Ireland.
But some Democrats criticized the deal, which in effect turns one of America’s largest corporations into a foreign company.
The companies say the merger, due for completion in the second half of next year, will deliver more than two billion dollars in cost savings over the first three years. Pfizer stockholders get one share of the combined company for each of theirs.
As expected, the deal will allow Pfizer to perform a tax inversion and domicile in Allergan’s official homeland of Ireland, which will lead Pfizer to rename itself Pfizer PLC at the expected close of the deal in about nine months.
Pfizer’s Chief Executive Ian Read, 62, will be CEO of the combined company, with Allergan’s Saunders, 45, serving in a very senior role focused on operations and the integration, the people added.
The agreement would also be the biggest deal in what has been a banner year for mergers, driven in part by consolidation in the health care and pharmaceutical sectors.
The deal is a victory for Read, who in 2014 sought an inversion transaction with AstraZeneca, but was repeatedly rebuffed by the British company, which said Pfizer had undervalued its business.
US-based reporters said the deal is sure to draw political ire in a U.S. presidential election year.
Advertisement
John Colley, a professor at Warwick Business School in Britain, predicted even bigger deals as “industry players become concerned about being left behind in the race for scale”.
