Pfizer and Allergan weren’t the only ones that were unhappy with the U.S. Treasury’s April move to block their $160 billion proposed megamerger. The U.S. Chamber of Commerce and one Texas business group were, too--and now they’re doing something about it.
The pair sued the federal government Thursday, claiming that the Treasury Department’s move to tighten the reins on inversion deals violated the law, The Wall Street Journal reports.
According to the allegations, the government tweaked the Internal Revenue Code itself after Congress refused to get on board with President Barack Obama’s inversion-limiting legislative changes--and the way Thomas Donohue, the chamber’s president and CEO, sees it, “this is not the way government is supposed to work.”
“Instead of breaking the rules to punish companies engaged in lawful transactions, Washington should just do its job and comprehensively reform the tax code,” he said, as quoted by the WSJ.
The Treasury, for its part, told the newspaper in a statement that “this action was based on strong policy interests and clear legal authority."
The inversion crackdown that scuttled the Pfizergan transaction wasn’t the first of its kind. The April actions represented the third time the U.S. Treasury took matters into its own hands, with the first set--in October of 2014--toppling a proposed AbbVie-Shire merger.
Pfizer CEO Ian Read, for one, hasn't been shy about sharing his feelings on the topic. U.S companies paying high corporate tax rates "compete in a global marketplace at a real disadvantage," he wrote in a WSJ opinion piece back in April. Allergan's chief Brent Saunders spoke out against the move in April, too, telling CNBC that the companies felt as though the government singled them out unfairly with a “temporary rule.”
Meanwhile, though, Pfizer and Allergan have wasted no time making their way back to the M&A table--or so the rumors say. Pfizer is one of several Big Pharma players reportedly eying cancer drugmaker Medivation, and, earlier this week, reports cited Allergan as a potential suitor for Biogen--though it remains unclear whether the Massachusetts biotech is willing to sell.
- read the WSJ story (sub. req.)
Special Report: The 25 most influential people in biopharma in 2015 - Jacob Lew - U.S. Treasury Secretary
Related Articles:
Allergan CEO, Treasury secretary spar over death of 'Pfizergan' deal
Pfizer's $160B megadeal for Allergan collapses under new tax rules
Treasury suits up to fight Allergan merger
AbbVie calls it quits on $55B Shire takeover