New tax rules prompt Pfizer, Allergan to call off mega-merger

Washington

DUBLIN-BASED Botox-maker Allergan announced early on Wednesday it would abandon its mega-merger with US pharmaceutical giant Pfizer after new government regulations made the tax advantage of the cross-Atlantic deal more difficult to achieve.

The move is a huge victory for the Obama administration in its campaign against inversions, in which US-based companies buy or merge with a smaller foreign firm and move their headquarters overseas in order to lower their tax bill. The Treasury Department released new regulations on Monday to stem the tide of such inversions and Pfizer and Allergan spent two days scrambling to determine whether their merger still made financial sense.