Pfizer walks away from Allergan deal: WSJ

Pfizer Inc. and Allergan PLC terminated their planned $150 billion merger after the Obama administration took aim at the deal that would have moved the biggest drug company in the U.S. to Ireland to lower its taxes, according to The Wall Street Journal.
Pfizer will pay Dublin-based Allergan a breakup fee of $150 million. The breakup fee is relatively small, especially given Pfizer`s market value of some $200 billion, WSJ reported.
The decision to walk away is the latest setback in Pfizer`s long-running efforts to overcome what Chief Executive Ian Read has said was the company’s competitive disadvantage with foreign rivals that faced significantly lower tax bills.
Allergan, for its part, said it was disappointed that the Pfizer deal won`t move forward but said its business remains strong. The company also said it believes the Treasury Department’s new regulations will have no material effect on the company’s stand-alone tax rate, based on a preliminary review.
The White House denied the new rules were targeted at a specific company.
”The Treasury Department is not focused on a specific transaction, it`s focused on specific loopholes,” White House press secretary Josh Earnest said. The White House declined to address the specific Pfizer and Allergan situation, but Mr. Earnest said the administration would be ”pleased” if inversion deals fell through.

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