Taxes Drive Potential Merger of Pfizer, Allergan

화이자 CEO "높은 세금 탓에 해외로"…앨러간 인수 추진

최종수정 2015.10.30 12:57 기사입력 2015.10.30 12:57   

[아시아경제 뉴욕=김근철 특파원] 29일(현지시간) 미국 뉴욕 주식시장에서 단연 눈길을 끈 뉴스는 현지 제약업체 화이자가 보톡스 제조업체 앨러간 인수 작업에 나섰다는 내용이다.

세계 제2의 제약사 화이자는 규모가 2180억달러(약 250조원)에 이른다. 앨러간의 시가총액은 1130억달러다. 인수합병(M&A)이 성사되면 3000억달러 규모를 웃도는 올해 최대 M&A가 되는 셈이다. 글로벌 1위 제약업체 존슨앤드존슨(J&J)을 뛰어넘는 세계 최대 제약사가 탄생하는 것이다.

미 경제 일간 월스트리트저널 등 외신들은 화이자의 앨러간 인수 추진 배경으로 앨러간의 특허 확보, 경쟁력 강화, 세금절감 효과를 꼽았다. 특히 눈길을 끄는 것이 절세 효과다.

화이자가 아일랜드에 자리잡은 앨러간 합병 이후 본사를 아일랜드로 옮기면 막대한 절세 효과까지 볼 수 있다. 그러나 미 정부와 정치권은 이를 세금 회피 및 국부 유출 행위라며 강력히 비판하고 있어 앞으로 역풍이 만만치 않을 듯하다.

화이자의 이언 리드 최고경영자(CEO)는 이날 월스트리트저널과 가진 회견 중 "미국의 과도한 세제로 어쩔 수 없이 해외에서 대안을 찾을 수밖에 없다"며 "지금은 한 손이 묶인 채 해외 경쟁사들과 싸우는 꼴"이라고 발끈했다.

미 법인세는 35%로 선진국 가운데 매우 높은 수준이다. 화이자의 지난해 실효세율은 25.5%, 앨러간의 경우 4.8%였다.

리드 CEO는 작심한 듯 미 정부와 정치권을 향해 쓴소리도 쏟아냈다. 과도한 기업 세제야말로 워싱턴이 반드시 해결해야 할 과제라고 지적한 것이다. 그는 "법 개정을 위해 나름대로 무척 애썼지만 실패하고 말았다"며 투덜거렸다.

화이자 등 미국의 다국적 기업들은 높은 법인세 외에 해외 매출을 미국으로 들여올 때 부과되는 높은 세율도 문제라며 강력히 반발하고 있다. 애플이 해외 법인에 막대한 현금을 쌓아놓고도 미국에서 회사채까지 발행하는 것은 이 때문이다.

그러나 미 정부는 지난해 자국 기업의 해외 탈출과 이에 따른 절세 효과를 막겠다며 오히려 규제만 강화했다. 의회는 시원한 해답을 내놓지 못하고 있다. 

http://view.asiae.co.kr/news/view.htm?idxno=2015103008541456961

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Taxes Drive Potential Merger of Pfizer, Allergan

Pfizer in early talks to acquire Ireland’s Allergan, thrusting drug maker into rancorous debate over corporate taxes

By LIZ HOFFMAN,  RICHARD RUBIN and JONATHAN D. ROCKOFF

Updated Oct. 29, 2015 9:19 p.m. ET

Pfizer Inc. is pursuing what could be the biggest overseas takeover to lower U.S. corporate tax liability, showing that efforts in Washington to stem such deals have amounted to little.

Company officials confirmed Thursday a Wall Street Journal report that it was in early talks to acquire Ireland’s Allergan PLC, a $100 billion-plus pursuit that thrusts Pfizer, the maker of Advil and Viagra, into the rancorous debate over corporate taxes.

It isn’t clear what terms New York-based Pfizer has in mind, but the deal could be structured as a so-called inversion, in which a U.S. company buys a smaller foreign rival to move its legal home to a lower-tax jurisdiction abroad. American firms have seized on these transactions, drawing a regulatory crackdown last year and widespread political opposition.

Pfizer Chief Executive Ian Read was unapologetic about his desire to reduce Pfizer’s tax rate, saying Thursday that U.S. corporate tax rates have put the company at a disadvantage to its foreign rivals.

“We’re fighting with one hand tied behind our back,” Mr. Read said in an interview. While declining to comment on the Allergan talks, he said Pfizer was “doing what we need to do to ensure that we can continue to innovate.”

Such a takeover would create a pharmaceutical colossus, with a market value likely exceeding $300 billion. It would rank as one of the largest corporate mergers ever and push this year’s deal-making further into record territory.

Pfizer’s pursuit places it squarely at the center of an intensifying debate over the U.S. corporate tax rates, among the highest in the world. It is the clearest sign yet that efforts by regulators to discourage these inversions—and by politicians to stigmatize them—have fallen short.

The Treasury Department announced a plan a year ago to make these deals less attractive, mostly by limiting access to overseas cash. Some inversions faltered— AbbVie Inc., for example, abandoned its takeover of Shire PLC—but the pace is now nearly back to where it was.

Lawmakers and candidates in both parties want to reduce the tax advantages of incorporating abroad, but they disagree on how to do it.

Republicans support a revamp of the tax system that includes lowering the corporate rate. Democrats, meanwhile, favor tougher rules that would stop U.S. companies from pursuing these deals to lower their tax liability.

On the campaign trail, Republican presidential hopefuls Jeb Bush and Donald Trump have expressed support for lowering the corporate tax rate, which they say would reduce the incentives to move abroad. Democratic front-runner Hillary Clinton is “committed to cracking down” on the inversion deals, a spokesman said Thursday.

Last week, billionaire investor Carl Icahn pledged $150 million to a political-action committee that would lobby to reduce taxes on corporate profits earned overseas and support legislation to block inversions.

Rep. Kevin Brady, a Texas Republican who is running for chairman of the House Ways and Means Committee, said Thursday that major changes were unlikely until at least 2017.

“I want to make sure all our companies are no longer uncompetitive when we compete around the world for profits, for sales and for contracts,” Mr. Brady said on a taping of C-SPAN’s “Newsmakers.”

Companies, meantime, are on the move. At least eight firms, including fertilizer maker CF Industries Holdings Inc. and soft-drink bottler Coca-Cola Enterprises Inc., have pursued inversions in the past year, compared with 11 in the prior year.

Many American companies feel “backed in the corner,” Xerox Corp. Chief Executive Ursula Burns told President Barack Obama last month at a meeting of business leaders in Washington.

The pressure is particularly acute in the pharmaceutical sector, where many of the largest players are based in lower-tax countries: 17 of the 25 biggest drug companies by market value are foreign, and they paid an average 17% tax rate last year versus 24% for the U.S. companies, according to FactSet.

Mr. Read said Pfizer’s more lightly taxed foreign rivals can spend more on research.

Pfizer’s tax rate was 25.5% in 2014, versus the 4.8% paid by Actavis, which changed its name to Allergan after the two companies combined earlier this year. Trimming that rate to 15%, for example, would save nearly $2 billion in taxes, based on the profit Pfizer expects to post this year.

Another lure of moving abroad is access to cash trapped overseas. Pfizer, like many of its peers, makes much of its money abroad and keeps it there, tax-free but largely off-limits. Pfizer had more than $30 billion in cash and similar investments as of June 30, “significant portions” of which are held outside the U.S., according to a regulatory filing.

If Allergan’s shareholders end up owning more than 40% of the combined company, Pfizer could use that cash to help fund the transaction and for other purposes.

Last year, Mr. Read tried to buy London-based AstraZeneca PLC for roughly $120 billion. That deal fizzled, leaving Pfizer in search of a merger partner to lower its taxes and invigorate its product pipeline.

Allergan offers both: A string of big deals has put CEO Brent Saunders atop a $100 billion-plus giant best known for such aesthetic drugs as wrinkle-fighter Botox and eyelash-lengthener Latisse.

Write to Liz Hoffman at liz.hoffman@wsj.com and Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

Corrections & Amplifications: 

Pfizer Chief Executive Ian Read said that under the U.S. corporate tax code, Pfizer is competing against foreign companies “with one hand tied behind our back.” An earlier version of this story misquoted him as saying “with one hand tied behind my back.” (Oct. 29)

http://www.wsj.com/articles/allergan-confirms-pfizer-talks-1446126062

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Pfizer and Allergan Begin Merger Talks

A deal for Allergan would be the biggest announced takeover in an already busy year

By JONATHAN D. ROCKOFF,  DANA MATTIOLI and DANA CIMILLUCA

Updated Oct. 29, 2015 10:25 a.m. ET

Drug makers Pfizer Inc. and Allergan PLC are considering combining, in what would be a blockbuster merger capping off a torrid stretch for health-care and other takeovers.

Pfizer recently approached Allergan about a deal, according to people familiar with the matter, with one of them adding that the process is early and may not yield an agreement.

Dublin-based Allergan has a market capitalization of $112.5 billion, meaning that a deal for the company could be the biggest announced takeover in a year that is already on pace to be the busiest ever for mergers and acquisitions.

After The Wall Street Journal reported the talks, both companies confirmed under Irish takeover rules that they are in “preliminary friendly discussions.”

Allergan shares climbed 8% early Thursday, while Pfizer ticked up 0.1%.

A tie-up with Allergan could be a way for New York-based Pfizer to lower its corporate tax rate, as Dublin has a significantly lower tax rate than the U.S.

Speaking Thursday at The Wall Street Journal Viewpoints discussion series, Pfizer Chief Executive Ian Read said the company is at a “tremendous disadvantage” under the U.S. corporate tax code and added Pfizer is competing against foreign companies “with one hand tied behind our back.”

He declined to comment on the possible deal.

There are big obstacles for a deal to overcome, however. one could be price. Mr. Read, who has been on an acquisition trail of late, said during an earnings conference call on Tuesday that he had noticed falling share prices for rival drug companies. But, he said, “I’m not sure there has been a readjustment in what the investors and leaders of those companies believe those companies are worth in a transactional situation.”

Other issues could include the extent to which Pfizer would want to lay off employees and close facilities; the fate of Allergan CEO Brent Saunders; and the general makeup of a combined company’s management team, the person said.

If a deal were to be struck, it would add antiwrinkle treatment Botox, dry-eye treatment Restasis and other popular Allergan drugs to Pfizer’s arsenal of patent-protected medicines. Pfizer has been trying to bolster its branded-drug portfolio after recently completing a $16 billion acquisition of Hospira Inc. that boosted its off-patent drug business.

That could pave the way for a step that Pfizer executives have long been contemplating: breaking up the company into one business selling patent-protected drugs and the other selling off-patent drugs.

Allergan would also accelerate Pfizer’s growth. on Tuesday, Pfizer reported that third-quarter revenue declined 2.2% to $12.09 billion. Excluding factors like foreign exchange, revenue rose 6%. Allergan, which hasn’t reported its most-recent quarterly earnings yet, said during its second-quarter results presentation it was growing at a 10% clip.

Allergan reported total net revenue of $5.8 billion in the second quarter, and total revenue from branded products of $3.7 billion.

Last year, Pfizer unsuccessfully pursued AstraZeneca PLC in a deal that would have valued the British pharmaceutical company at about $120 billion. The deal was to be structured as a so-called tax inversion, in which Pfizer would move its headquarters overseas and lower its corporate tax rate. Pfizer aborted its takeover attempt amid resistance from AstraZeneca.

Pfizer made a takeover approach to Actavis PLC, the company Mr. Saunders then ran, a person familiar with the matter said in September of last year. But the talks didn’t result in a deal.

After coping with sales lost when top-selling drug Lipitor lost patent protection, Pfizer has been notching sales gains for new drugs like breast-cancer treatment Ibrance and blood-thinner Eliquis, as well as for the expanded use of the company’s Prevnar pneumonia vaccine.

As of Wednesday’s market close, Pfizer’s market value was about $216 billion. If a deal is struck, it would easily surpass Anheuser-Busch InBev NV’s $104 billion preliminary agreement to buy giant beer rival SABMiller PLC, which currently ranks as the year’s largest announced deal.

Allergan has been one of the most prolific acquirers in the pharmaceuticals industry, though recently Mr. Saunders has tried to emphasize the work of the company’s laboratories developing drugs in-house.

Allergan has had an unconventional rise, starting off as a company called Watson Pharmaceuticals Inc. In 2012, Watson acquired Swiss rival Actavis Group and adopted that name. Later, the company bought Warner Chilcott PLC and Forest Laboratories Inc. in multibillion-dollar deals.

Mr. Saunders was CEO of Forest Labs, and became CEO of Actavis after the deal. Shortly after, Allergan was put into play when Valeant Pharmaceuticals International Inc. made an unsolicited offer to buy the California company.

Actavis then stepped in as a white knight and bought Allergan, taking the company’s name. Then in July, Allergan agreed to sell its generic-drug business to Israel’s Teva Pharmaceutical Industries Ltd. for more than $40 billion.

In Thursday’s interview, Mr. Read also called Valeant’s acquisitive business model a “dead end” for research that has pushed companies to “be more efficient.”

“I don’t see that business model as sustainable,” he added.

Valeant, the Quebec-based drug maker, is well known for its vaunted business model of growing through acquisitions instead of investing in research and development.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com, Dana Mattioli at dana.mattioli@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

Corrections & Amplifications: 

Pfizer Chief Executive Ian Read said that under the U.S. corporate tax code, Pfizer is competing against foreign companies “with one hand tied behind our back.” An earlier version of this story misquoted him as saying “with one hand tied behind my back.” (Oct. 29)

http://www.wsj.com/articles/pfizer-allergan-considering-combining-1446079506