US drugs firm Pfizer has agreed a record $160bn (£105bn) tie-up with Ireland-based Allergan in a deal that will be the largest healthcare merger in history.
It will allow Pfizer, the company behind Viagra, to slash its tax bill by moving its corporate address to low-tax Ireland, in a so-called ‘corporate inversion’.
“The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world,” said Pfizer chief executive Ian Read.
Pfizer said the new company would retain the US firm’s name and its New York operational headquarters, but would have its ‘principal executive office’ in Ireland.
This will allow the combined company to slash its tax bill on earnings derived from outside the US.
Ireland levies tax on foreign earnings at a far lower level than the US, which tops up overseas profits to the US headline rate of up to 39%.
The deal, the largest ever in the healthcare sector, will also see Pfizer get its hands on Allergan products such as cosmetic anti-ageing treatment Botox.
Pfizer tried to buy British drugs firm AstraZeneca but talks collapsed amid a US crackdown on corporate inversions.
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