Boston, MA 08/18/2014 (wallstreetpr) – Pfizer Inc. (NYSE:PFE), a $182 billion market capped company whose shares are down 6.5% this year, does not hide its intentions to renounce its U.S. corporate citizenship to pursue tax havens in Europe.
Shares of the company declined 0.31% to $28.64 on Friday, marking another day of decline.
Talking about seeking tax haven, Pfizer tried to bid for the U.K.-based AstraZeneca plc (ADR) (NYSE:AZN) in which it offered about $117 billion, but the bid flopped as AstraZeneca declined to accept the offer. Given the U.K. takeover laws, Pfizer can only make another advance for AstraZeneca after six months. Many analysts have maintained that Pfizer Inc. (NYSE:PFE) could make another bid for AstraZeneca when another opportunity comes.
Acquisition approach
However, the company is also looking for other deal that can support its agenda. No specific names have been mentioned about companies that Pfizer is circling for a deal that would boosting its tax inversion plans, but it is looking at a good potential partner in Europe. A move to Europe is expected to save the company millions or even billions of dollars in tax savings.
Legal approach
Besides seeking buyout opportunities in Europe, Pfizer Inc. (NYSE:PFE) is also seeking for political solutions to its tax challenges. The reason many U.S. companies, especially drug firms, are seeking to move their tax headquarters to Europe is that the region offers favorable tax environment compared with the U.S. As such, Pfizer is seeking to have lawmakers address the tax issue so that U.S. companies can be comfortable being at home.
According to Pfizer’s CEO, Ian Read, they are lobbying Congress to support tax reforms on disadvantageous tax policies, mostly those that hurt the healthcare companies. However, the challenge with political approach to the tax issue is that it might take several years, which is why Pfizer Inc. (NYSE:PFE) is keen for an acquisition deal.
To meet the tax inversion threshold, analysts say that Pfizer’s acquisition would be in the tune of $100 billion, especially given its more than $180 billion market value.
