Charles H. Johnson & Associates Announces Investigation of Merger Between Pfizer Inc. and Allergan plc

MINNEAPOLIS, Jan. 12, 2016 (GLOBE NEWSWIRE) -- Charles H. Johnson & Associates announces that it has launched an investigation into a proposed merger involving Pfizer Inc. and Allergan plc.  On November 23, 2015, Pfizer announced that it had entered into an agreement with Allergan, subject to shareholder approval, pursuant to which the businesses of Pfizer and Allergan will be combined under Allergan plc, which will be renamed “Pfizer plc.”  Upon closing the transaction, the combined company is expected to maintain Allergan's Irish legal domicile.  Pfizer plc will keep its global operational headquarters in New York and establish its principal executive offices in Ireland.  Allergan shareholders will receive 11.3 shares in exchange for each Allergan share, and Pfizer shareholders will receive one share of Pfizer plc for each Pfizer share. 

The proposed transaction is intended to substantially lower Pfizer’s current tax rate on its foreign earnings by replacing the current U.S. tax rates to which its foreign earnings are subject with the much lower Irish tax rate.  Pfizer announced that it expects that the effective tax rate for the combined Pfizer/Allergan will be 17 to 18 percent.  Pfizer’s effective tax rate last year was 25.5 percent.  By reincorporating in Ireland, Pfizer will reduce the tax rate on its foreign earnings from the U.S.’s 35% rate to Ireland’s 12.5% rate.

In addition, for certain Pfizer shareholders, the transaction will be treated as a taxable event as the merger will be considered a sale of their shares, rather than a tax-free exchange as is typically the case in such transactions.   Many Pfizer shareholders who have held the stock for more than a year will pay federal taxes at rates of 15% to 30% on their gains, in addition to state capital gains taxes.  In announcing the transaction, Pfizer disclosed that it had retained three financial and three legal advisers, none of whom were disclosed as representing or advising Pfizer’s taxpaying shareholders.

The investigation is looking into the whether or not the proper effort was made by the Board of Pfizer to represent the interests of the company's shareholders. Also, the investigation seeks to determine whether the Pfizer Board of Directors has violated applicable law by directly breaching and/or aiding and abetting others in breaching their fiduciary duties of loyalty, due care, independence, candor, good faith, and fair dealing any by engaging on other wrongful conduct.

If you currently hold Pfizer Inc. stock and believe that you may be subject to capital gains taxes upon completion of the merger, or have any questions concerning this notice or the rights with respect to this matter, please contact:

Jonathan R. Mencel, Esq. ([email protected])
Law Offices of Charles H. Johnson, P.A.
2599 Mississippi Street
New Brighton, MN  55112
(651) 633-5685