Pfizer executives: new Treasury rules hamstring inversion deals

Pfizer Inc's finance chief said on Tuesday that new rules by the U.S. Treasury will make it "prohibitively harder" for American companies to buy foreign firms in order to relocate to lower-tax jurisdictions.

Chief Financial Officer Frank D'Amelio and Chief Executive Officer Ian Read, in an interview, declined to say whether Pfizer will again approach British drugmaker AstraZeneca Plc for such a tax inversion.

Pfizer had pursued AstraZeneca for six months, only to have its final $118 billion bid rejected on May 26. Under UK takeover rules, it can make a new approach in late November.

D'Amelio on Tuesday said the new Treasury rules issued on Sept. 22 create bigger roadblocks for inversion deals. "Trying to realize the benefits has gotten a whole lot harder than it was prior to these new regulations - prohibitively harder."

But Read quickly interjected, "If we were to say 'prohibitively,' it would imply you can't do an inversion. I don't think they're prohibitively harder. They've made it more difficult to realize the value, and hence may influence what you're willing to pay to get an inversion."

In a conference call earlier on Tuesday, Read noted the Treasury Department has suggested additional restrictions may be coming.

"I can't predict what they are going to do - no one can," Read said, adding he was worried about the "uncertain situation."

U.S. drugmaker AbbVie two weeks ago walked away from its $55 billion deal to buy Dublin-based drugmaker Shire, another tax-inversion deal, citing the new Treasury rules.

"Now that (AbbVie) has canceled its deal, it's less likely that Pfizer will move ahead" with its attempt at AstraZeneca, said Edward Jones analyst Ashtyn Evans.

Pfizer on Tuesday reported stronger-than-expected quarterly results, helped by growing sales of its cancer drugs and drug sales in emerging markets.

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Pfizer, U.S. Treasury

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