Wednesday 29 March 2017

Pfizer won't split itself in two after Irish move blocked

Pfizer's shares were down 1.2pc to $33.85 in pre-market trading yesterday. Photo: Reuters
Pfizer's shares were down 1.2pc to $33.85 in pre-market trading yesterday. Photo: Reuters

Natalie Grover

US drugmaker Pfizer, which has been considering a split into two companies for more than two years, said yesterday it will not do so because the move would not create any shareholder value.

Pfizer will keep its low-growth generics and patent-protected branded medicines separate, giving it the option to split down the road if "factors materially change at some point in the future."

Pfizer said yesterday that the decision would not have an impact on its 2016 financial forecast.

The decision not to create two publicly traded companies follows the collapse of its planned $160bn acquisition of Allergan after a change in US tax law took away the tax benefits of the deal, which would have seen the merged company come under the umbrella of an Irish holding company.

Investors shifted their focus to whether Pfizer would split after the company terminated the Allergan deal in April.

Investors were expecting the company to step back from the split, Sanford Bernstein analyst Tim Anderson said in a research note.

"Where to from here? The company seems likely to leave open its option for a future split-up, but more immediately it may continue hunting for M&A targets," he wrote.

Pfizer's shares were down 1.2pc to $33.85 in pre-market trading yesterday. The pharma giant began openly planning for the possible split in early 2014, saying it would operate the businesses as separate divisions and track their progress for three years before reaching a decision.

Now the company says its analysis showed no benefit to shareholders, and that tax costs and business disruptions were factors it considered. (Reuters)

Irish Independent

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