AstraZeneca's Resistance to Pfizer Adds Fuel to Obama's Tax Inversion Fight

Sept. 4, 2014

The potential $117 billion AstraZeneca-Pfizer deal, squashed in late May, would have lowered NY-based Pfizer's tax rates, by moving its official headquarters to London -- a tax-reducing step that has become very visible in pharma mergers this year.

According to the WSJ, AstraZeneca hired Wall Street advisers with close ties to the Obama administration who urged senior administration officials to clamp down on corporate inversion -- the merger technique that would have made Pfizer's proposed deal more lucrative.

Though the Pfizer deal ultimately faltered over price, concerns raised by AstraZeneca's advisers were among the factors that led the Obama administration to fight the growing inversion trend, a senior administration official told the Wall Street Journal.

Treasury Secretary Jacob Lew is expected to address the practice on Sept. 8 in a business tax overhaul speech. The Obama administration is said to be currently drafting options that would strip away the economic benefits of such tax structures.

Read the WSJ article