Pfizer to Explore Favourable Tax Inversion Deals Despite US Curbs
US giant Pfizer are still actively exploring tax inversion deals, despite new rules to curb these deals. Pfizer are still looking to dramatically lower their tax burden with their revenues declining.
Chief executive Ian Read, recently had a conference call with analysts to discuss the new rules set by US Regulators and he explained that the the regulators are making it harder for companies that are looking to change their headquarters to overseas.
“Recently there has been a lot of attention paid to deals involving re-domiciling and the proposed regulations announced by the treasury department, which make it more complicated and also potentially limits value that could be created by US companies that re-domicile,” Read said.
He added that re-domiciling is still one potential source of creating value for Pfizer.
“As we’ve said previously we will look at any business development opportunities based on strategic-fit including operational, portfolio and financial synergies. We continue to evaluate a broad set of potential options on a case-by-case basis to accelerate value creation to shareholders,” he said.
The new rules which have been set can also change in the future and be even more strict on controls, with a new rule able to be passed with out any notice.
Estimates put the US corporation tax rate at 40%, which would make it one of the highest in the world. With this in mind many US companies especially the ones involved in the pharmaceutical sectors, have been looking at acquiring their foreign peers so that they can shift their tax base from the US.
With this happening more often, US regulators are worried about the number of companies leaving the US tax regime and so this is why the new rules were implemented. The new rules have also scuppered deals already with the AbbVie $55 billion deal to buy Irish based drugmaker Shire collapsing two weeks ago.
Meanwhile Pfizer have reported revenues of $12.3 billion for the third quarter which works out as 2% decline from last year. although the third quarter profit increased 3% to $2.7 billion.
Earlier this year Pfizer attempted their own inversion deal by trying to acquire UK based AstraZeneca for just under £70 billion but this failed after facing stiff opposition from AstraZeneca.
Since then Pfizer have reportedly approached rival Actavis for a possible takeover deal.
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