Pfizer stockholders will have the option of receiving one share of the combined company for each of their Pfizer shares or receiving cash, provided the aggregate amount of cash to be paid is not less than $6 billion or more than $12 billion.
The tax aspect of the deal has been seen as critical. The US corporate tax rate of 35 percent is among the world’s highest and compares with Ireland’s rate of 12.5 percent.
Upon the closing of the transaction in the second half of 2016, the companies said the combined company was expected to maintain Allergan’s Irish legal domicile.
The US Treasury, concerned about losing tax revenue, has been taking steps to clamp down on tax inversion deals but experts have said these moves will do little to prevent Pfizer from shifting its domicile.
Reports that the companies were in talks emerged a month ago. Since then, speculation had centered on the terms, the domicile issue, and the roles of Read, known for his focus on research and development, and inveterate dealmaker Saunders.
Apart from male libido drug Viagra and cholesterol drug Lipitor, Pfizer’s major drugs include nerve pain treatment Lyrica and Prevnar, a treatment for pneumonia.
Allergan, best known for its anti-wrinkle treatment Botox, also makes Alzheimer’s drug Namenda and dry-eye medication Restasis.
Allergan’s shares were down 1.7 percent in premarket trading, while Pfizer’s were down 2.1 percent.
Up to Friday’s close, Allergan shares had risen 8.8 percent since reports of the deal talks emerged on Oct 28. Pfizer’s shares had fallen 9.2 percent.
The businesses of Pfizer and Allergan will be combined under Allergan Plc, which will be renamed Pfizer Plc. (Source: bdnews24.com)
Pharma Jogot