Oct 3 (Reuters) - Salix Pharmaceuticals Ltd and Cosmo Pharmaceuticals SpA said they have terminated their merger agreement, citing a “changed political environment”.
Raleigh, North Carolina-based Salix, which makes drugs for gastrointestinal disorders, said in July it would merge with Cosmo’s Irish subsidiary, a deal that would allow Salix to move its tax domicile abroad in a practice known as inversion.
The Obama administration took several actions last month to curb “inversion” deals that allow companies to escape high U.S. taxes by reincorporating abroad.
“The changed political environment has created more uncertainty regarding the potential benefits we expected to achieve,” Salix CEO Carolyn Logan said in a statement.
Reuters reported last month that some of the top 20 investors at Salix are threatening to vote down a proposed deal to buy a unit of Cosmo Pharmaceuticals, and are pressing Salix to consider selling itself instead. (Reporting by Supriya Kurane in Bangalore; Editing by Sunil Nair)