Allergan shares tumble on new tax inversion rules
NEW YORK -Allergan's (AGN) stock is down nearly 20 percent in premarket Tuesday trading after the U.S. announced an aggressive push in its campaign to shut down so-called tax inversions by American companies.
The Treasury Department announced a new package of rules late Monday aimed at making tax inversions, a maneuver in which U.S. companies reincorporate overseas to take advantage of lower tax rates, less financially appealing. The new regulations seek to limit internal corporate borrowing that shifts profits out of the U.S.
Pfizer's (PFE) planned acquisition of Allergan is aimed at reducing Pfizer's tax bill. The proposed transaction, announced last November, would move the official headquarters of Pfizer from New York to Ireland, where Allergan is based.
Pfizer and Allergan say they are reviewing the new Treasury rules.
Investors scattered before the opening bell Tuesday. Allergan's stock is down $52.06 to $225.51 per share, while Pfizer rose 2 percent, or 61 cents, to $31.34.