Pharmacy Daily | Pfizer, Allergan deal is off

DRUG manufacturing giants Pfizer and Allergan have mutually agreed to terminate their proposed merger, following changes in US tax regulations which sunk the $160 billion deal. New rules issued by the US Treasury aim to curb “inversion deals”, whereby US-based companies switch bases to a country with better tax benefits. Earlier in the week, US President Barack Obama called global tax avoidance a “huge problem”, urging congress to introduce tougher laws to stop US companies from tax evasion. If the deal was realised, Pfizer would have effectively slashed its tax bill by taking legal residence in Ireland where Allergan is registered. That would have meant it could more tax-effectively access profits garnered in other jurisdictions around the world where it had already paid local tax on the money. The deal-breaker will see Pfizer pay Allergan a break-fee of up to $400 million as per the merger agreement. Both Pfizer and Allergan are yet to issue official statements.

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