Biotech Breakup: What is the Impact on Biotech Stocks focused on Cannabis?
The termination of the $160 billion merger between Pfizer Inc. (PFE) and Allergan Plc (AGN) has been confirmed.
The driving factor behind this decision stems from the rules issued by the United States Treasury Department which are focused on making tax inversion deals less profitable.
Moving Addresses, Not Assets
President Obama said the rules are meant to limit one of the most indirect tax loopholes available and prevent companies from decreasing their tax liability.
The reason why this deal came under such scrutiny is not only due to the size of the deal, but also its structure.
Earlier this morning, PFE confirmed the termination of the merger which move the company’s address but not its headquarters or operations. If the merger was completed, Pfizer’s address would change to Ireland which has a lower corporate tax rate.
Wiped out Hundreds of Millions in Potential Savings
If the deal was completed,...
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