Pfizer says that the deal will help prescription drug makers. Pfizer will buy Allergan, the maker of products like Botox, for $160 billion. Under the terms of the agreement expected to be announced today, Pfizer will pay 11.3 of shares for each Allergan share.
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Pfizer Inc.’s announcement that it intends to merge with Ireland-based Allergan and move its headquarters to Dublin has sparked a furious debate over corporate responsibility and the tax code.
“Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry”, said Read.
Is Pfizer attempting to dodge taxes?
US President Barack Obama has called inversions unpatriotic and has tried to crack down on the practice.
Soon you could be introduced to the world’s largest drugmaker by sales.
Pfizer said it did not plan to change its dividend policy of paying out roughly half of an adjusted measure of earnings per share. On the other hands, Allergan’s CEO Brent Saunders will be given an important position to oversee the operations and the integration, according to the people familiar with the matter. That company would have its legal domicile and principal executive offices in Ireland. Pfizer said it expected the merger to result in savings of $2bn in the first three years. Researchers have estimated that if left unchecked, inversions will cost the US Treasury nearly $20 billion (€18.8 billion) in the next 10 years. Both the company would be benefitted from the deal. USA efforts to rein in such deals have proved largely ineffective and many companies have joined with overseas partners to cut their tax bills.
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No one actually disputes that the US treats corporate foreign profits differently from most countries, including all of the large industrial nations.
