dollarsNovember 24 2015

In the biggest pharmaceuticals deal in history US giant Pfizer has agreed a mammoth deal to purchase Ireland based, Allergan for $160bn (£106bn).

The merged company, to be known as Pfizer Plc. , will become the world's biggest drug seller. The deal, subject to regulatory approval, is expected to be completed late 2016.

One theory is that the deal could lead to Pfizer moving its headquarters to Dublin to escape the high US corporate tax rates.

Rae Ellingham, Research Analyst, Charles Stanley, comments on the Pfizer acquisition of Allergan:
“Pfizer has announced that it has agreed a $160 billion deal to acquire Allergan plc, a deal which is likely to be largely driven by taxation benefits, with the US corporate tax at 35 percent versus Ireland’s 12.5 percent.  The deal looks set to go ahead despite US Treasury opposition and the introduction of new rules designed to prevent tax inversion where a company relocates its legal domicile to a lower tax nation.
“Rules aimed at preventing inversions were first tightened after Pfizer bid for AstraZeneca back in 2014 and played a large part in AbbVie’s withdrawal of a $54 billion offer for Shire.  Should the Pfizer Allergan deal go ahead we would expect that tax inversion rules may be tightened even further and potentially new legislation introduced.
“If any other US companies have had their eye on Shire, domiciled in Ireland like Allergan, it would pay for them to move quickly.  Shire can only have become a more attractive takeover target, post the 20% fall in its share price following the Group’s announcement of its intention to pursue US Baxalta Inc.”





Info on Pfizer-Allergan Merge