The biggest buyout of the year has made its mark on 2015. Drug giant Pfizer has bought Allergan for a whopping $160 billion, making it the world’s biggest drug maker.
The deal is known as an “inversion,” a business arrangement in which an American corporation joins one that is headquartered in a nation with a lower tax rate in order to save money. Pfizer is expected to save millions in U.S. taxes each year, though the company will keep its global operational offices in New York. NBC News drew upon Bernstein analyst Dr. Tim Anderson’s comment that the combination will basically be Pfizer “but with a lower tax rate.” Anderson expects a 7 percent reduction in Pfizer’s tax rate.
Pfizer is well-known throughout the world for its cholesterol-fighting Lipitor. Allergan is primarily focused on the Botox market. The two companies have coalesced to form what is officially known as Pfizer Plc, with main offices in Ireland.
With presidential nominee campaigns in motion, both GOP and Democratic front-runners took their jabs at Pfizer, though for different reasons. At the front of the Democratic polls, Hillary Clinton said the move would hurt everyday US taxpayers. She asked Washington to ensure that large companies are required to pay their share of taxes as well.
Donald Trump called Pfizer’s move “disgusting” and said politicians should be ashamed. He was notably unhappy about Pfizer leaving the U.S.
Pfizer’s Ian Read will be the company’s chairman and chief executive. Brent Saunders of Allergan will become Pfizer Plc’s chief operating officer and president. According to the BBC, Read said, “The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company.”
The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and more therapies to more people around the world.
Saunders noted that the combination move would allow Allergan to utilize greater resources and operate on a much larger scale. The arrangement between the two companies is the most expensive pharma deal in history.