Allergan plc Ordinary Shares AGN were trading down more than 15 percent on Tuesday afternoon, while shares of Pfizer Inc. PFE were up more than 2.5 percent, after rumors about a possible cancellation of the deal between both the companies started to circulate the Street.
A Reuters article published earlier on Tuesday cited a source familiar with the issue, which assured Pfizer “is leaning toward abandoning its $160 billion agreement to buy Allergan Plc in light of the U.S. Treasury's new measures to curb such tax evading deals.”
Related Link: Evidence Pfizer Could Revisit GlaxoSmithKline Or AstraZeneca Deals If Allergan Falls Through
However, the source added, there is nothing set in stone yet; the companies and their lawyers will continue with their discussions for the remainder of the day, at least. But, under the new tax scheme, Allergan would no longer benefit from moving to Ireland; and Pfizer is not willing to alter the terms of the agreement, the source supplemented.
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Both Pfizer and Allergan declined to comment.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above
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