Pfizer, Allergan Kill Megamerger Over Tax Regulations

It took Pfizer and Allergan less than 48 hours to nix their plan to build one of the world’s largest drugmakers, placing the blame squarely on the U.S. Treasury Department.

The companies announced last week that they were scrapping their proposed $160 billion reverse-merger due to temporary rules instituted by the Treasury that significantly reduce the tax benefits of inverse mergers.

Under the temporary rules, which expire in April 2019, Irish Allergan’s purchase would be treated as a “domestic entity” for tax purposes, thereby negating the tax benefits for both companies.