The FT reported (23 November) that US pharmaceutical giant Pfizer is poised to buy Dublin-based Allergan, leading to a backlash among US politicians – including Hillary Clinton – that Pfizer will relocate overseas to minimise its tax bill as the latest US corporation to follow the trend for ‘inversions’. Pfizer will apparently save at least $21bn in future tax bills by moving the combined group to Ireland, as Pfizer CFO Frank D’Amelio told analysts the new company’s effective tax rate after the acquisition would be 17–18%, compared to 25.5% in 2014. Chief executive Ian Read is currently seeking approval from Washington for Pfizer’s second attempt at a tax inversion, which comes 18 months after he pulled out of a £69bn takeover bid for Anglo-Swedish AstraZeneca due to pressure from British politicians.
The new attempt at an inversion via merger has reignited concerns in the US about inversion loopholes, while Allergan’s chief executive Brent Saunders has warned that any political intervention in the deal by the Obama administration would be ‘short sighted’. Pfizer and Allergan would have to pay the other party $400m if either pulls out of their merger due to a change in the law or any other circumstance.
The FT reported (23 November) that US pharmaceutical giant Pfizer is poised to buy Dublin-based Allergan, leading to a backlash among US politicians – including Hillary Clinton – that Pfizer will relocate overseas to minimise its tax bill as the latest US corporation to follow the trend for ‘inversions’. Pfizer will apparently save at least $21bn in future tax bills by moving the combined group to Ireland, as Pfizer CFO Frank D’Amelio told analysts the new company’s effective tax rate after the acquisition would be 17–18%, compared to 25.5% in 2014. Chief executive Ian Read is currently seeking approval from Washington for Pfizer’s second attempt at a tax inversion, which comes 18 months after he pulled out of a £69bn takeover bid for Anglo-Swedish AstraZeneca due to pressure from British politicians.
The new attempt at an inversion via merger has reignited concerns in the US about inversion loopholes, while Allergan’s chief executive Brent Saunders has warned that any political intervention in the deal by the Obama administration would be ‘short sighted’. Pfizer and Allergan would have to pay the other party $400m if either pulls out of their merger due to a change in the law or any other circumstance.
