James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Pfizer, AstraZeneca deal may be dead in the water
Author: James F. McDonough
Date: June 4, 2014
Key Contacts
Back
Tax inversions have been covered heavily in financial media in recent months, causing a significant stir of public opinion regarding corporate tax rates and some discussion of government action.
One of the most significant inversions to be considered is the one between Pfizer, the second largest global pharmaceutical company, and AstraZeneca, the eighth, according to the BBC. A merger between the two companies would serve to significantly reduce Pfizer’s tax liabilities by allowing it to redomicile in Europe, and cause the new company to be the largest pharmaceutical company in the world. Pfizer’s 2013 revenue came in at $52 billion, AstraZeneca’s was $26 billion and Johnson & Johnson led the world’s drug companies at $71 billion.
The possible merger between these two companies led to calls for action on the corporate tax rate from both sides of the U.S. political aisle. Politicians are split, however, as to whether litigation should limit inversions or lower the corporate income tax rate.
The public may not have to worry about this specific merger going through, however, as the smaller company has rejected Pfizer’s final offer of £69 billion, according to The Guardian. Leif Johansson, chairman for AstraZeneca, said that Pfizer’s offer of £55-a-share fell short of the price that the U.S. company was told was necessary.
Pfizer said May 16 that it would pay £53.50 per share, an offer that AstraZeneca rejected, the news source reported. The latter company said that weekend that the price would need to be at least 10 percent higher, leading to a valuation of £74 billion. Pfizer raised its offer to £55 per share, and raised the cash portion of its bid to 45 percent from a previous 33 percent. The rest of the offer is payable in Pfizer shares.
While inversions remain problematic in the world of U.S. corporate tax law, it seems that this particular merger is unlikely to happen. Pfizer has already said that it will not be pursuing a hostile takeover.
- Practices: Corporate Tax Planning, Tax and Trusts & Estates, Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
Arbitration vs. Litigation vs. Mediation: What New Jersey Businesses Should Know Before Signing a Contract
Arbitration resolves disputes privately before an arbitrator whose decision is usually final, while litigation resolves them in court with full rights of appeal. Whether a business ends up in arbitration or litigation is often decided when it signs the contract, long before any dispute arises. Key Takeaways When facing a contract dispute, carefully consider your […]
Author: Graham Staton
Can You Own Part of a New Jersey Business Without a Written Agreement?
Can you own part of a business in New Jersey without a written agreement? Yes, it is possible. Under New Jersey’s Uniform Partnership Act, a partnership can arise when two or more people carry on a business as co-owners for profit, whether or not they ever intended to form one. Ownership doesn’t necessarily depend on […]
Author: Michael Mietlicki
Crisis-Proofing Your New Jersey Business: Building a Crisis Response Plan Before You Need One
For New Jersey businesses, crisis preparedness should be viewed as a legal and operational function, not simply an emergency-management exercise. A well-designed crisis response plan can help preserve evidence, protect confidential communications, meet reporting obligations, limit unnecessary exposure, and prevent an already difficult situation from becoming a larger legal problem. Key Takeaways A serious crisis […]
Author: Sean M. Pena
Monmouth County's Next Development Wave: What Developers and Investors Need to Know
Monmouth County is entering a significant new phase of development. For those looking to acquire property or undertake a new project, understanding the market opportunity is only the beginning. The more important question is whether a particular property can actually be developed as contemplated and what approvals, agreements, and other conditions will be required to […]
Author: Donald M. Pepe
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.