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BUSINESS A25
Thursday 7 April 2016

Allergan, Pfizer call off proposed $160B mega-merger

The Pfizer logo appears on a screen above its trading post on dress there on paper, are a cent to $32.87, while Aller- Those include mergers and
the floor of the New York Stock Exchange, Wednesday, April hot issue in the presidential gan shares jumped 7.7 per- acquisitions, buying rights
6, 2016. The biggest U.S.-based drugmaker, Pfizer Inc., will stay race. President Obama on cent to $244.20 Wednes- to experimental drugs,
put thanks to aggressive new Treasury Department rules that Tuesday called them “one day afternoon. share repurchases and
succeeded in blocking Pfizer from acquiring rival Allergan and of the most insidious tax “We can pivot very quickly paying down part of Al-
moving to Ireland, on paper, to reduce its tax bill. loopholes out there,” add- from combination planning lergan’s $40 billion in debt,
ing that Treasury’s new rules to independent planning,” Saunders told The AP.
(AP Photo/Richard Drew) are meant to make wealthy Allergan CEO Brent Saun- Best known for its Botox
corporations shoulder their ders told The Associated anti-wrinkle injections and
LINDA A. JOHNSON day. Pfizer, which is based tax responsibility like work- Press, adding that both Restasis drops for dry eye
AP Business Writer in New York, will pay Aller- ing-class Americans. companies were prepared disease, Allergan had a
Top U.S. drugmaker Pfizer gan $150 million as reim- Pfizer and Allergan re- for a Treasury move to profit of $3.7 billion on rev-
and Irish rival Allergan are bursement for its deal-relat- grouped Wednesday and block their deal but consid- enue of $15 billion last year.
charting independent fu- ed expenses. began touting their pros- ered it a small risk. The company is the result
tures after scrapping a re- It was Pfizer’s third, and pects as solo companies. Saunders already is fo- of multiple inversions, and
cord $160 billion deal tor- most expensive, failed at- They are far from being in cused on closing Allergan’s despite its Dublin address
pedoed by new Treasury tempt at an inversion, leav- dire straits as they contem- $40.5 billion deal to sell its operates from offices in
Department rules meant ing analysts to speculate plate their next moves: Both generic drug business to Parsippany, New Jersey.
to block American compa- Pfizer will drop the strat- are highly profitable, have Israel’s Teva Pharmac- “Allergan will continue to
nies from moving their cor- egy for good. The merger multiple lucrative medicine ueticals Industries Ltd., the invest in the United States,”
porate addresses overseas would have moved Pfizer’s franchises and strong pipe- world’s top generic drug- Saunders said, with a focus
— on paper — to avoid U.S. address, but not its opera- lines of experimental drugs, maker. He expects that to on jobs creation, expand-
taxes. tions or headquarters, to and each have enough close by the end of June, ing factories and research
The rules issued Monday, Ireland, where it would cash to quickly do another bringing Allergan about facilities, and doing re-
aimed at stopping the have paid hundreds of mil- deal. $36 billion after taxes to in- search on cures for diseas-
companies’ “tax inversion” lions of dollars less in annual Shares of Pfizer rose 4.8 per- vest in “opportunities.” es with huge unmet need.
deal, wiped out its financial U.S. corporate taxes.
incentives and rationale for Tax inversions, in which a
Pfizer Inc., though they had big U.S. company buys
no impact on Allergan PLC. a smaller one in another
That led Pfizer and Allergan country with a lower tax
to walk away “by mutual rate, and then moves the
agreement” on Wednes- combined company’s ad-

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