Pfizer kills $150 billion Allergan merger after U.S. closes tax loophole

Pfizer drops bid for Allergan — (Image credit: Spencer Platt/Getty Images)

Late Tuesday, Pfizer's board of directors voted to terminate the drugmaker's purchase of smaller rival Allergan, a day after the Treasury Department enacted rules designed to curb corporate tax inversions, The Wall Street Journal reports. The companies are expected to formally announce the end of the proposed merger Wednesday morning. Valued at about $150 billion, the deal would have been the biggest corporate inversion, a maneuver in which a U.S. company buys an overseas rival (Allergan is now based in Dublin) then changes its address to slash its U.S. tax payments. Pfizer will pay Allergan a breakup fee of no more than $400 million.

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Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.