Thursday 29 September 2016

Pfizer nails down Allergan deal ahead of US crackdown

Published 24/11/2015 | 02:30

Ian Read, chairman and chief executive officer of Pfizer, left, and Brent Saunders, the president and chief executive officer of Allergan, stand for a photograph in front of Pfizer headquarters in New York yesterday after agreeing to combine in a record $160bn deal. Photo: Michael Nagle/Bloomberg
Ian Read, chairman and chief executive officer of Pfizer, left, and Brent Saunders, the president and chief executive officer of Allergan, stand for a photograph in front of Pfizer headquarters in New York yesterday after agreeing to combine in a record $160bn deal. Photo: Michael Nagle/Bloomberg

Two of the country's biggest employers are to merge after drugs giants Pfizer struck a record-breaking $160bn deal to buy Allergan that will cut its global tax bill by moving its headquarters to Ireland.

  • Go To

The acquisition will create the world's largest drugmaker, with combined annual revenue of about $64bn and is the biggest-ever tax inversion deal, a controversial trend that has seen US companies slash their tax bills by reincorporating overseas - including here.

Pfizer employs around 3,300 people in Ireland at seven major sites across the country.

The maker of drugs including Viagra has been in Ireland since 1969. Allergan, which makes Botox, has around 1,000 employees here, mainly at its site in Westport, Co Mayo.

A Pfizer spokeswoman said its too early to know whether the merger will have implications for job numbers here.

"The Irish sites manufacture many of both companies' top medicines for global export and these are growth areas for the company," he said. "There are synergies to be achieved globally as a result of the deal; it is too early in the process to know the impact of these."

Pfizer's chief financial officer, Frank D'Amelio, said he expected a combined tax rate of 17pc to 18pc by 2017, down from 25pc for Pfizer last year.

It's the main reason the deal is certain to be controversial in the US. President Barack Obama has called inversions unpatriotic and is pushing to crack down on deals, with limited success. To avoid potential restrictions, the Allergan deal is structured as smaller Dublin-based Allergan buying Pfizer, although the combined company will be known as Pfizer Plc and continue to be led by chief executive officer Ian Read, who has long sought to slash Pfizer's US tax rate. (Additional reporting Reuters)

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business