Pfizer merger terminated
20 May 2016 by Evoluted New Media
The £105bn deal that would have seen Pfizer merge with Irish pharmaceutical company Allergen has been called off.
The £105bn deal that would have seen Pfizer merge with Irish pharmaceutical company Allergen has been called off. Announced last November, the deal was supposed to create a company with ‘the strength to research, develop and deliver more medicines’. However under investigation from the US Treasury, with many critics suggesting it was a way for Pfizer to pay less tax, the move has now been cancelled.
The US Treasury issued new regulations in April that prevents inversion deals – an American company moving its base elsewhere in the world to potentially pay less tax. Corporation tax in Ireland is 12.5%, in the US – 35%.
Ian Read, Chairman of Pfizer said: “Pfizer approached this transaction from a position of strength and viewed the potential combination as an accelerator of existing strategies. We remain focused on continuing to enhance the value of our innovative and established businesses.”
Pfizer will now consider whether to separate their innovative (brand name) and established (generic and non-patented) business by the end of the year. Allergen will be paid £106m by Pfizer for reimbursement of expenses as part of the transaction.
Brent Saunders, chief executive of the Allergen said although he was disappointed that the transaction would no longer proceed, “Allergen is poised to deliver strong, sustainable growth built on a set of powerful attributes.”
If successful the merger would have been the largest in history, dwarfing the Pfizer acquisition of Warner Lambert for £63bn in 2000.
