Pfizer, Allergan terminate proposed merger

Pfizer and Allergan plc announced today that the merger agreement between the two companies has been terminated by mutual agreement.

Pfizer said in a press release that the decision was based on actions announced by the U.S. Department of Treasury on April 4, “which the companies concluded qualified as an ‘Adverse Tax Law Change’ under the merger agreement.”

Pfizer has agreed to pay Allergan $150 million for reimbursement of expenses associated with the transaction, according to news releases from both companies.

“Pfizer approached this transaction from a position of strength and viewed the potential combination as an accelerator of existing strategies,” Ian Read, chairman and CEO of Pfizer, stated in the release. “We plan to make a decision about whether to pursue a potential separation of our innovative and established businesses by no later than the end of 2016, consistent with our original timeframe for the decision prior to the announcement of the potential Allergan transaction.”

“While we are disappointed that the Pfizer transaction will no longer move forward, Allergan is poised to deliver strong, sustainable growth built on a set of powerful attributes,” Brent Saunders, CEO and president of Allergan, stated in a release.

Allergan reported in its release that it believes that based on a preliminary review of proposed regulations outlined in the U.S. Department of Treasury notice that the regulations will have no material impact on its standalone tax rate.

Reference: www.allergan.com, www.pfizer.com