It took no time for news of a $160 billion merger between Pfizer and Allergan to spur objections from several presidential candidates.
The deal will allow Pfizer to move its domicile from the US to Ireland, where its tax bill will fall drastically. The politicians see this expatriation as a slap in the face.
The companies seem to be pretty confident of this. They agreed to pay only a tiny breakup fee in the event that a change in laws causes them to part ways.
The termination fee for pulling out of the deal for other reasons would stand between $3bn and $3.5bn, in line with other deals of this size, but the merger agreement allows the companies to walk away for a fraction of that amount “due to an adverse change in the law”.
The Financial Times said there was nervousness that the largest ever “inversion” deal could fall prey to political interference, because it would allow Pfizer to avoid at least $21bn in future US tax bills by moving the combined group to Ireland, where Allergan is based.
A Pfizer spokesman said the company believes that tax reform is important to US competitiveness, a view that CEO Ian Read has repeated since long before the Allergan deal.
Full content: The Financial Times
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Judge Mehta Questions Both Sides in Landmark Google Antitrust Case
May 2, 2024 by
CPI
FCC Urges Urgent Funding for Removal of Chinese Telecom Equipment from U.S. Networks
May 2, 2024 by
CPI
Former Pioneer CEO Facing Potential Criminal Charges For Colluding With OPEC
May 2, 2024 by
CPI
South Korea’s Antitrust Regulator Greenlights K-Pop Powerhouse Deal
May 2, 2024 by
CPI
Exxon’s Pioneer Purchase Approved, Former CEO Barred from Board
May 2, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI