AstraZeneca asked President Obama for help resisting Pfizer’s tax-cutting buyout bid
It turns out AstraZeneca did a lot more than just ask for UK political opposition to fend off Pfizer’s $117 billion takeover attempt earlier this year. The British drugmaker also looks to have appealed to Washington and in particular the White House.
The Wall Street Journal has reported, that AstraZeneca hired two Wall Street insiders who had lose links to the White House to step in as Pfizer began their siege. Morgan Stanley’s Thomas Nides and Evercore Partners’ Roger Altman were the chosen two. Their target: the tax-inversion strategy key to Pfizer’s buyout plans.
Pfizer’s attempts failed with a final bid being rejected in May of this year, since then their has been senior DC officials taking it upon themselves to move against further tax inversion deals. These deals allow US companies to dramatically cut their taxes by moving their headquarters to a tax friendlier location. Buying AstraZeneca would allow Pfizer to relocate across the the Atlantic and manage to save themselves several billion dollars in the process.
For obvious reasons the US officials aren’t all that crazy about tax inversion deals. Pfizer are not the only US company looking for tax friendlier shores. Recently AbbVie have struck a $54 billion deal with Irish drug maker Shire partly for this reason. The Journal reports that President Obama and his administration have scolded the deal makers as un-American. Treasury Secretary Jacob Lew called on Congress to take action and now it seems the Treasury is weighing up taking action its self.
In the meantime AbbVie have hired K Street lobbyists Nixon Peabody and Lincoln Policy Group to help keep its Shire merger on track in the face of inversion opposition. Currently under the two companies buyout agreement, AbbVie are unable to walk away if US tax laws change, also if the deal does fall through AbbVie are required to pay Shire $1.6 billion.
As for news on Pfizer and AstraZeneca UK takeover rules allow AstraZeneca to invite a would be buyer for negotiations. They can also let Pfizer make a one off private offer. Although in November Pfizer can start a takeover bid in the public eye. Investors appear to betting that another Pfizer offer will materialise. As for AstraZeneca, Pascal Soriot there CEO said earlier this week that he isn’t concerned about another fight. So we’ll see what the coming months has to offer.
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