Viagra maker Pfizer and Botox maker Allergan ink US$160 billion deal

American politicians from both sides of the political divide rounded on Tuesday on Pfizer’s $155 billion takeover of Ireland’s Allergan to create the world’s largest drugs company.

On Monday, Pfizer Inc. said that they were going to be purchasing Allergan Plc, the Botox maker for a record breaking $ 160 billion.

Moving its headquarters to Ireland will result in a significant reduction in the total amount of corporation tax paid by the company – The Irish Times estimates that Ireland could gain an extra €620m per year after the completion of the deal.

Democratic presidential candidate Bernie Sanders condemned the deal and urged the Obama administration to block it. Republican hopeful Donald Trump declared the move “disgusting”, while Democrat frontrunner Hillary Clinton said in a statement seen by The New York Times that “we can not delay in cracking down on inversions that erode our tax base”.

“The combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction that brings together two biopharma powerhouses to change lives for the better”, Saunders said.

“Synergies carry all sorts of hidden risks that are rarely considered sufficiently and most often not priced into the deal”, he said. No comment was made specifically on the deal between Pfizer (NYSE:PFE) and Allergan but it was stated that legal action must be taken against companies to prevent inversions.

Allergan’s shares were down 1.7 per cent in premarket trading, while Pfizer’s were down 2.1 per cent.

U.S. politicians condemned the deal as a tax dodge.

Pfizer CEO Ian Read is quite upbeat about the merger.

Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer investors will receive one share of the combined company for each of their Pfizer shares.

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

The U.S. Treasury, concerned about losing billions of dollars in tax revenue, has been taking steps to limit the benefits of increasingly popular tax inversion deals, but it admitted last week that it would take legislation from Congress to stop such maneuvers. While the US Treasury has issued a raft of anti tax inversion legislation, analysts believe that Pfizer will successfully structure the deal to avoid those new regulations. A wholly owned subsidiary of Allergan will be merged with and into Pfizer, and subject to receipt of shareholder approval, the Allergan parent company will be renamed “Pfizer plc” after the closing of the transaction.

Finance Minister Michael Noonan has rejected suggestions that a $160bn (€150.3bn) mega tie-up between United States rivals Pfizer and Allergan will throw Ireland’s low corporate tax back into the world’s spotlight. Pfizer Chief Financial Officer Frank D’Amelio said he expected a combined tax rate of 17 percent to 18 percent by 2017.