World Economy

Pfizer-Allergan Deal Threatened

Pfizer-Allergan Deal ThreatenedPfizer-Allergan Deal Threatened

The US Treasury Department took new steps on Monday to curb tax-avoiding corporate “inversions,” with the pending $160 billion merger of Pfizer Inc and Allergan Plc seen as a potential casualty, Reuters reported. The changes, less than a year before President Barack Obama ends his term, follow sharp political criticism of Pfizer’s and Allergan’s merger, which would be the largest inversion deal ever. While the rules did not single out this deal, one of the provisions takes aim directly at it. Shares of Dublin-based Allergan fell 22% in after-market trading, while shares of New York-based Pfizer rose 3%. The companies said they were reviewing the treasury department’s notice. The federal government has grappled with a wave of inversions in recent years as US companies have sought to slash their tax bills by redomiciling overseas, though their core operations and management usually remain in the United States even as they claim a new tax home.