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Pfizer won't split

Monday, September 26, 2016 - 01:16

The pharmaceutical giant said it was already accessing many of the potential benefits of a split. But as Fred Katayama reports, taxes may be the reason behind its decision.

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Pfizer concluding one is more than two. Pfizer deciding to remain a single company instead of splitting itself into two publicly traded companies. It had been considering for years whether to split its growing patent-protected branded medicine business of newer drugs from its low-growth business of older generic drugs. Pfizer CEO Ian Read said, "We are already accessing many of the potential benefits of a split - sharper focus, increased accountability, and a greater sense of urgency." Bernstein analyst Timothy Anderson thinks taxes were the reason, saying, "It became clear to us that one of the drivers for pulling the plug on this plan likely related to the tax-dis-synergies splitting up would create, which explains prior attempts by Pfizer to 'invert' its tax base, first through the attempted acquisition of AstraZeneca and later Allergan." The decision comes six months after Pfizer scrapped its plan to acquire Ireland's Allergan, a move that was aimed at lowering taxes by moving its headquarters overseas. While Pfizer is keeping its options open of a possible split in the future, Anderson believes the company for now will keep pursuing acquisitions. Pfizer shares shedding some of their six percent gain this year in early trading.

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Pfizer won't split

Monday, September 26, 2016 - 01:16