$160 billion deal to combine Pfizer and Allergan raises outcry

Allergan has agreed to merge with Pfizer in a $160bn deal that will create the world’s largest pharmaceutical company.

Allergan investors will receive 11.3 shares of the new company for each Allergan share for a total now valued at $363.63 per share, more than a 30 percent premium prior to news reports of the tie-up talks. However, last week, as rumors of new inversion deals spread, the Treasury Department and the Internal Revenue Service presented new rules to further limit the benefits of such transactions.

And the merger is actually good for the U.S., Read contends-despite the loss in tax dollars and a $2 billion cost-cutting target that means layoffs are on the way.

“We can not delay in cracking down on inversions that erode our tax base”, Clinton, the party’s frontrunner for the November 2016 election, said in a statement.

Pfizer will improve its research and development capabilities in new molecular entities and product line extensions.

Democratic politicians condemned Pfizer Inc’s tax-avoiding “inversion” deal with Ireland’s Allergan Plc on Monday, bringing another round of Washington hand-wringing over corporate taxes, but probably no immediate legislative action.

The companies said that they expected to achieve more than $2 billion in annual cost savings over the first three years after the deal closes.

Pfizer shareholders would have control of 56% of the combined company. The deal caps a remarkable consolidation wave roiling the US health care industry and creates the world’s biggest drugmaker by sales.

The companies’ combined medicine chest would put Pfizer staples such as impotence treatment Viagra, cholesterol fighter Lipitor and nerve pain treatment Lyrica alongside Allergan’s Botox wrinkle treatment, Alzheimer’s drug Namenda and dry-eye medication Restasis.

Pfizer’s current tax rate is about 25% and would drop below 20% in Ireland, analysts estimate.

The deal will be a welcome success for Pfizer a year after its embarrassing climb down from pursuing an aggressive take over of United Kingdom pharmaceutical firm AstraZeneca.

With these two big pharmaceutical companies merging together, so are their intellectual properties to discover and produce more drugs that could be more effective to fight against sicknesses.

In the past, Pfizer’s mergers have taken a heavy toll on CT, sometimes unfolding over years.

Pfizer shareholders will receive one share of the combined company for each Pfizer share and will be eligible to receive at least some of their shares in cash.

The Pfizer-Allergan deal is likely to fuel critics’ concerns that consumers would pay even more for drugs as competition declines among manufacturers, insurers and retailers.

On Monday, the company announced said it would make a decision on the potential separation by the end of 2018.