Tag Archives: pfe

Allergan Extends Losses As Pfizer Scraps Merger Over Inversion Rules

Pfizer ( PFE ) and Allergan ( AGN ) confirmedWednesday morning that they are ending their $160 billion merger agreement after the U.S. Treasury unveiled new rules to curb tax inversion deals Monday. Ireland-based Allergan slid 1.9% in pre-market trading on the stock market today . Shares plunged 14.8% Tuesday to 236.55, hitting the lowest levels since late 2014, amid concerns that the new rules imperiled the deal. Pfizer rose 1.2% before the open after gaining 2.1% to 31.36 on Tuesday. “Pfizer Inc. today announced that the merger agreement between Pfizer and Allergan plc has been terminated by mutual agreement of the companies,” the drug giant said in a statement . “The decision was driven by the actions announced by the U.S. Department of Treasury on April 4, 2016, which the companies concluded qualified as an “Adverse Tax Law Change” under the merger agreement.” U.S. companies have a strong incentive to redomicile overseas to reduce their exposure to America’s unusually high corporate tax rates and global reach. Pfizer’s board reported voted to scrap the deal given that there would no longer be tax benefits. The new rules appeared to single out the Pfizer-Allergan deal, though the companies were not named specifically. The Treasury targeted “serial inverters” and Allergan has a history of inversion deals. Allergan is run from New Jersey, but has its official headquarters in Dublin. Pfizer will pay $150 million in merger-related expenses. Pfizer CEO Ian Reed said the drug giant may go ahead with a corporate split: “We plan to make a decision about whether to pursue a potential separation of our innovative and established businesses by no later than the end of 2016” The Obama administration has become more aggressive going after big mergers. The Justice Department is expected to sue to block the Halliburton ( HAL )– Baker Hughes ( BHI ) deal, perhaps as early as this week. Baker Hughes shares fell 5.1% on Tuesday while Halliburton climbed 1.2%. Meanwhile, the FTC is in the midst of a court battle seeking to block Staples ( SPLS ) from buying office supplies rival Office Depot ( ODP ).

Pfizer, Allergan To Kill Merger Wednesday Over New Tax Inversion Rules

Pfizer ( PFE ) and Allergan ( AGN ) will announce Wednesday morning that they are mutually ending their $160 billion merger agreement after the U.S. Treasury unveiled new rules to curb tax inversion deals Monday, according to widespread reports. Ireland-based Allergan stock closed down 14.8% to 236.55 on the stock market today amid concerns that the new rules imperiled the deal. Pfizer rose 2.1% to 31.36. U.S. companies have a strong incentive to redomicile overseas to reduce their exposure to America’s unusually high corporate tax rates and global reach. Pfizer did not want to alter the terms of the deal given there would no longer be tax benefits. The deal had a $3.5 billion breakup fee, but it drops to $400 million if they are adverse changes.

After Hours: Allergan, Tesla Motors, Walt Disney Shares Fall

Allergan ( AGN ) tumbled on new tax inversion rules, Tesla Motors ( TSLA ) skidded on weak Q1 deliveries and Walt Disney ( DIS ) retreated as a key executive exited, raising doubts about who might be the eventual successor to CEO Bob Iger. Allergan stock fell 21% after the Treasury Department issued new rules to curb so-called tax inversions. That includes steps to curb earnings stripping, a method used to reduce taxes after an inversion. Pfizer ( PFE ) and Ireland-based plan to merge, with Pfizer’s takeover structured to reduce U.S. tax liability. Pfizer stock edged higher late after closing up 2.3%. Allergan had closed 3.5% higher. Tesla Motors said that it delivered 14,820 vehicles in Q1, up nearly 50% vs. a year earlier but below the company’s February forecast for 16,000. Tesla blamed “severe” parts shortages for the Model X crossover — and its own “hubris.” Tesla shares fell 4% late, erasing nearly all its 4% regular-session gain on huge preorders for the Model 3.  The Model 3 is supposed to go into production by late 2017, with total vehicle production hitting 500,000 by 2020. Walt Disney said after the close that COO Thomas Staggs, who was seen as a possible successor to CEO Bob Iger, is leaving May 6. Staggs will serve as a special advisor to Iger. Disney stock fell 2% after closing down 0.4%. Meanwhile, Salesforce.com ( CRM ) agreed to buy artificial intelligence startup MetaMind for undisclosed terms, the latest big tech to step up AI takeovers and investments. Salesforce CEO Marc Benioff invested in MetMind back in December 2014. Salesforce stock was little changed late.