Pfizer, Allergan Proposed Merger May Be An 'Inversion'

by Mike Godfrey, Tax-News.com, Washington

02 November 2015

Two of the world's largest pharmaceutical companies, US-based Pfizer Inc. and Ireland-based Allergan Plc, have disclosed they are in merger talks to form what could be the largest-ever US corporate tax inversion, with a probable value of more than USD100bn.

Inversion techniques are being used by some US multinationals to move their tax residences abroad – away from the high 35 percent US headline federal corporate tax rate – and to unlock their unrepatriated earnings held offshore.

In an announcement on October 29, Pfizer confirmed that it is now in preliminary friendly discussions with Allergan in relation to a potential merger, in which it may move its corporate headquarters from New York to Dublin.

This followed an official statement made by Allergan under Irish takeover rules in which it disclosed that it had been approached by Pfizer.

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