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New rules from the Treasury Department regarding inversion affect merger activity in the pharmaceutical sector.
Citing recent tax rules, Salix terminated their proposed merger with Cosmo Pharmaceuticals’ Irish subsidiary and is now in takeover discussions with Actavis, reports FirstWord Pharma. Salix backed out of its agreement with Cosmo when it realized it could no longer benefit from the corporate tax structure overseas. Carolyn Logan, president and CEO of Salix, said in a statement, “the changed political environment has created more uncertainty regarding the potential benefits we expected to achieve.”
Instead, Salix is reportedly looking to sell itself to Actavis after a deal with Allergan went sour. The New York Times reports that acquiring Salix would mean that Actavis could be too large to be acquired by Pfizer, which approached Actavis about a takeover earlier this year.