Allergan and Pfizer have announced that they are calling off their proposed merger.
In December 2015, the two companies announced the proposed merger at a total enterprise value of approximately $160 billion, which would bring Pfizer back into a therapeutic area of focus of dermatology. It also would have created the world’s largest drug company and moved Pfizer-Allergan’s headquarters to Ireland, where the corporate tax rate is 18 per cent as opposed to the US corporate tax rate of 35 per cent.
The decision to call off the merger was ‘by mutual agreement.’ Pfizer cited the Treasury’s new regulations, which were issued on Monday, to make tax inversions less lucrative.
The Treasury Department’s latest rules take aim at US companies that move their headquarters overseas to lower their tax bills.
With the discussion of a merger now over, the two drug makers will have to focus on other strategies to boost profits and sales.
