custom ad
NewsApril 7, 2016

The biggest U.S.-based drugmaker, Pfizer Inc., will stay put thanks to aggressive new Treasury Department rules that succeeded in blocking Pfizer from acquiring rival Allergan and moving to Ireland -- on paper -- to reduce its tax bill. As analysts and investors had expected, the two companies called off the record $160 billion merger early Wednesday "by mutual agreement." Pfizer cited Treasury's new regulations, issued late Monday, to make such "tax inversions" less lucrative...

By LINDA A. JOHNSON ~ Associated Press

The biggest U.S.-based drugmaker, Pfizer Inc., will stay put thanks to aggressive new Treasury Department rules that succeeded in blocking Pfizer from acquiring rival Allergan and moving to Ireland -- on paper -- to reduce its tax bill.

As analysts and investors had expected, the two companies called off the record $160 billion merger early Wednesday "by mutual agreement." Pfizer cited Treasury's new regulations, issued late Monday, to make such "tax inversions" less lucrative.

The merger would have moved Pfizer's address -- but not its operations or headquarters -- to Ireland, where it would pay far less in corporate taxes.

Receive Daily Headlines FREESign up today!

Pfizer Inc., based in New York, has agreed to pay Dublin-based Allergan PLC $150 million for reimbursement of expenses.

Now the two drugmakers will focus on other strategies to boost profits and sales quickly, with Pfizer saying it will decide by year's end whether to separate its global established products business, which sells older, mostly off-patent drugs.

Pfizer has endured years of pressure from analysts and others to break up the company so growth and profits could accelerate. That's easier said than done, given Pfizer's huge scale, increasing pressure from insurers for bigger discounts and a revenue base that's been declining over the last several years as multiple blockbusters such as cholesterol drug Lipitor have lost billions in annual sales to much-cheaper generic copycats.

Story Tags
Advertisement

Connect with the Southeast Missourian Newsroom:

For corrections to this story or other insights for the editor, click here. To submit a letter to the editor, click here. To learn about the Southeast Missourian’s AI Policy, click here.

Advertisement
Receive Daily Headlines FREESign up today!