Pfizer and Allergan on Monday morning announced they would merge in a massive, $160 billion deal that will create the world's largest drugmaker, producing treatments as varied as Lipitor and Botox.
The deal is structured as a reverse merger, with smaller Dublin-based Allergan buying New York-based Pfizer, and it is likely to renew concerns over "inversions," where U.S. companies are bought by or merge with foreign firms in order to reduce U.S. corporate tax burdens. In a press release, Pfizer said the combined company would generate more than $2 billion in savings over the first three years and would enjoy a tax rate of 17 to 18 percent -- far less than Pfizer's current corporate tax rate of 25 percent.
Just days ago, the U.S. Treasury Department issued rules seeking to crack down on these types of deals, which President Obama has labeled "unpatriotic."
