Various media outlets are reporting that even as the U.S. Treasury may be preparing to adopt a stricter stance toward corporate tax inversions, Pfizer is continuing to pursue a potential acquisition of Allergan. If the massive merger gets done, it could be worth approximately $150 billion, according to Reuters.
Buying Allergan would give Pfizer a chance to redomicile in Ireland and avoid the U.S. higher corporate tax rate. In response to an analyst’s question about inversions, Pfizer CEO Ian Read, Pfizer CEO and chairman said during a late-October earnings call that, “To be successful in the future, we need to have a competitive tax rate,” according to a Seeking Alpha transcript.
Allergan issued a press release in late October confirming the company “has been approached by Pfizer Inc. and is in preliminary friendly discussions regarding a potential business combination transaction. . . ” On an earnings call earlier this month, Brent Saunders, Allergan CEO and president, declined to confirm whether “business combination” discussions were about Pfizer’s interest in potentially acquiring Allergan.