Pfizer Inc. is leaning toward abandoning its US$160 billion integration with Dublin-based drugmaker Allergan Plc in the wake of new US measures to curb such tax avoidance deals, Reuters reported.
Although talks between the two firms were continuing, Pfizer is rethinking its plans as the new rules could mean that the firm will no longer benefit from a move to Ireland, the report said, citing a source familiar with the matter.
The US Treasury Department took new steps on Monday to curb tax-driven corporate inversions whereby companies seek to slash their tax bills by redomiciling overseas.
Pfizer’s lawyers have presented alternative ways for the two companies to salvage the inversion but there was little appetite for it, the source told Reuters.
“Pfizer is aware that the Treasury will keep ruling against any solution it can come up with,” the source was quoted as saying.
One of the main hurdles to the deal was Treasury’s decision impose a three-year limit on foreign companies bulking up on US assets to avoid ownership limits for a later inversion deal.
Pfizer’s Chief Executive Ian Read has been put off by the Treasury’s new measures and is unwilling to fight a legal battle with the US authorities, the report said.
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