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
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Author: Patrick T. Conlon
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
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.