Pfizer, Allergan announce $160B merger

U.S. pharmaceutical giant Pfizer and Irish-based Allergan announced Monday that they have entered into a merger agreement — a move that would represent the largest corporate inversion to date.

{mosads}Congress and the Obama administration have been critical of inversions, or transactions in which a U.S. company merges with a foreign company and incorporates the merged company in a foreign country in order to lower its taxes. The $160 billion deal between Pfizer and Allergan was announced days after the Treasury Department and the Internal Revenue Service announced guidance designed to reduce the tax benefits of inversions. Treasury also issued guidance aimed a curbing inversions in September 2014.

Under the terms of the proposed merger, Pfizer and Allergan will combine under Allergan plc, which will be renamed Pfizer plc. The merged company is expected to keep Allergan’s Irish legal residence, according to a news release.

“Through this combination, Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry,” Pfizer Chairman and Chief Executive Officer Ian Read said.