Pfizer to buy Allergan in $160bn deal

Pfizer’s 0bn merger with Ireland-based Allergan became the latest mega-deal to be confirmed this year.

Chris Edwards, director of tax policy studies at Cato Institute, tells The Daily Caller News Foundation, “we [America] have an emergency situation with the corporate tax system”, and “we are shooting ourselves in the foot”, with excessively high tax rates.

USA drugs giant Pfizer is merging with Irish-headquartered Allergan in a record-breaking $155bn (£100bn) deal. “It’s time for Congress to get serious, close the loopholes, and prevent these kind of inversions from happening in the future”.

It’s an example of a so-called corporation inversion, where a USA company hooks up with a foreign corporation to benefit from its address and the lower tax rate that comes with it.

Pfizer’s Chief Executive Ian Read, 62, will be CEO of the combined company, with Allergan’s Saunders, 45, serving in a very senior role focused on operations and the integration, the people added.

It will also open up their products such as Viagra and Botox to new markets. When average state corporate taxes are included, the top USA marginal rate tops 39 percent.

The businesses of Pfizer and Allergan will be combined under Allergan Plc, which will be renamed Pfizer Plc. The president and chief operating officer will come from Allergan. Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share of the combined company for each of their Pfizer shares. Many companies – Medtronic included – have shifted their home bases to Ireland to take advantage of these tax rates – and more will likely follow. Mr. Bisaro, now the executive chairman of Allergan, will join the board of the combined company.

“If it’s not 60%, it’s not an inversion”, said Willens.

Out of the 12 analysts polled by TipRanks, 9 rate Pfizer stock a Buy, 2 rate the stock a Hold and 1 recommends a Sell.

Democratic presidential candidates Hillary Clinton and Sen.

The acquisition would move the headquarters of Pfizer to Ireland making it the biggest tax inversion ever.

After a wave of similar deals, the U.S. cracked down in 2004 with an anti-inversion law targeted at firms relocating to tax havens.

Clinton also said that, as president, she would fight inversion deals and promised to illustrate steps “to prevent these kinds of transactions”. “This part of the state has one of the 10 worst economies in the country”.

But a few Democrats criticized the deal, which in effect turns one of America’s largest corporations into a foreign company. Raleigh, N.C.-based Salix Pharmaceuticals and the Italian firm Cosmo Pharmaceuticals terminated a reverse merger, citing changes in the political environment.

The Treasury said in an emailed statement Monday that it doesn’t comment on specific transactions.

AbbVie called off its inversion after the Treasury first acted in 2014.

“Our actions can only slow the pace of these transactions”.

For consumers, however, such combinations could lead to higher drug prices, as well as higher taxes to cover the lost tax revenue, said Jerry Reisman, a NY merger expert.

The lower tax burden helps explain why inversions have been especially popular among drug makers.

The US Treasury Department has done this before. “The U.S. Congress owns the tax code”, he said.

Republican front-runner Donald Trump, who has called for a corporate tax overhaul, called the deal “disgusting” in a statement, saying “our politicians should be ashamed”. Allergan stock fell 3.4 percent, to $301.72, while Pfizer dropped 2.6 percent, to $31.33.