There’s a lot that could go wrong with Pfizer’s planned tax inversion with Allergan, and investors seem to have picked up on that, sending the company’s stock price a-tumblin.'
Allergan needs to finish selling its generics business and the deal needs to get the thumbs up from everyone, all before the expiration of the antitrust waiting period. It is a delicate, ungainly dance, and investors keep waiting for the lovers to fall flat on their faces.
Certainly, the FTC doesn’t seem to be in a rush to sign off on the thing.
Pfizer Inc. and Allergan PLC on Wednesday said federal regulators are seeking more information on their pending merger deal, a so-called inversion that would create the world’s biggest drugmaker and move one of the top names in corporate America to a foreign country.
But all of y'all worry too much according to Citi analyst Liav Abraham. And that’s because the only thing she sees that could stop this would be legislation, and that legislation would require a bipartisan dance even more nimble and improbable than the successful antitrust cha-cha. And who in the wide world wants to get cheek-to-cheek with Ted Cruz?
While certain actions could increase the incremental tax rate of the combined company, they are unlikely to prevent the transaction from closing, Ms. Abraham said. She said her research has convinced her that the U.S. government has few options to block the deal besides passing legislation, something she thinks is unlikely to happen before the merger closes.