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
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
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.