Pfizer, Allergan Come Together In A $160 Billion Merger

  • Pfizer, Allergan Come Together In A $160 Billion Merger

Pfizer, Allergan Come Together In A $160 Billion Merger

In what would be the biggest inversion ever, New York-based Pfizer could save hundreds of millions in US taxes annually because it would move its tax headquarters to Ireland, where Allergan is based.

Pfizer shareholders obtain one share of the consolidated business for each and every of theirs.

Allergan shareholders will receive 11.3 shares in the combined company for each share held.

The merged firm will be the world's biggest drug maker by sales. The combined company will be called Pfizer PLC and will be run by Pfizer's CEO, with executive management staying in NY and extensive operations across the USA, but it will no longer be taxed as a U.S. company.

THE CONCLUSION of a record-breaking deal between pharmaceutical companies Pfizer and Allergan has been labelled a "disaster" by US Democrat presidential candidates Bernie Sanders and Hillary Clinton amid fears it could resurrect the prospect of tax inversions.

Last week pharmaceutical powerhouse Pfizer announced a $160 billion merger with Allergan, reported Healthcare Finance News.

Pfizer (NYSE:PFE), which was founded in 1849, stands to save about $21 billion in forthcoming tax bills by flying to Dublin with the merger, joining several brands such as Burger King and Liberty Global that have moved overseas through inversions. This merger, experts suggest, will help Pfizer escape the US tax structure which now imposes roughly 25 percent corporate tax, In its new structure, Pfizer's taxes may be cut to about 12% or even below that.

This process, known as corporate inversion, is a common yet controversial process that has seen U.S. companies lessen their tax burden by shifting their corporate infrastructure to Ireland. Allergan produces the wrinkle treatment Botox and Restasis for dry eyes, and also has a superior pipeline of medicines in development.

Shares in both companies declined following the deal's confirmation.

Despite attempts by Congress and the Treasury Department to thwart the practice, about 50 US companies have inverted in the past decade, and more are considering it, according to the nonpartisan Congressional Research Service. "We can not delay in cracking down on inversions that erode our tax base", said the ex-U.S. secretary of state and former NY senator in a statement. Since Friday's close, Pfizer had a market cap of $199 billion; Allergan was at $123 billion.