REFILE-UPDATE 7-Obama's inversion curbs kill Pfizer's $160 bln Allergan deal
(Removes extraneous apostrophe in first paragraph)
By Caroline Humer and Ransdell Pierson
NEW YORK, April 5 (Reuters) - U.S. drug maker Pfizer Inc agreed on Tuesday to terminate its $160 billion agreement to acquire Botox maker Allergan Plc, in a major victory to U.S. President Barack Obama's drive to stop tax-dodging corporate mergers.
The decision to end the biggest tax "inversion" ever attempted, which would have seen Pfizer slash its tax bill by redomiciling to Ireland where Allergan is registered, came a day after the U.S. Treasury unveiled new rules to curb inversions.
While these new rules did not name Pfizer and Allergan, one of their provisions targeted a specific feature of their merger; Allergan's previous history as a major acquirer of other companies. The subsequent demise of the deal allows Obama to claim a big win during his last year in office.
Earlier on Tuesday, Obama called global tax avoidance a "huge problem" and urged Congress to take action to stop U.S. companies from tax-avoiding corporate "inversions", which lower companies tax bills by redomiciling overseas.
"While the Treasury Department's actions will make it more difficult... to exploit this particular corporate inversions loophole, only Congress can close it for good," Obama said.
Pfizer and Allergan will announce the termination of their deal on Wednesday, a source familiar with the matter said, asking not to be identified ahead of any official statement. Pfizer and Allergan declined to comment.
Pfizer was concerned that any tweaks to salvage the inversion might have provoked new rules by the U.S. Treasury, and so was leaning earlier on Tuesday to end the deal, a source had earlier told Reuters. Continued...