Could Pfizer's failed bid for AstraZeneca impact future mergers?

This week saw the Pfizer/AstraZeneca saga finally come to an end. May 26 was the final day that Pfizer had to either table a formal bid or go hostile, both actions that the company said it would not follow. But with a takeover off the cards, there remains a residual impact of the high-profile talks.

Focus on US tax laws

During talks, Pfizer said it expected the combined company to have management in both the USA and the UK, but to maintain head offices in New York and list its shares on the New York Stock Exchange. It was open in its ambition to take advantage of tax inversion, a loophole in US tax law that allows companies domiciled in a low-tax country to save millions. Currently, laws state that foreign shareholders have to hold at least 20% of the company’s stock in order for it to move overseas. In the proposed Pfizer deal, AstraZeneca would have retained 26% of the company.