EXCLUSIVE-Pfizer negotiating 2-3 pct Allergan break-up fee -sources - RTRS
19-NOV-2015 07:41:33
Nov 19 (Reuters) - Pfizer Inc PFE.N is negotiating a break-up fee in the range of 2 to 3 percent of the value of its roughly $150 billion potential acquisition of Allergan Plc AGN.N, proportionally in line with other deals, people familiar with the matter said.
A break-up fee of that order in the merger agreement would show that Pfizer and Allergan do not see regulatory risk as an existential risk to their deal, despite the U.S. Treasury planning this week to tighten the rules on corporate tax inversions, a key aspect of their plan.
The break-up fee in the Pfizer-Allergan deal would still be one of the highest ever agreed because the deal itself would be one of the biggest mergers ever. Break-up fees however are set in relation to the target company's size, and one of the people said the break-up fee in the Pfizer-Allergan deal would proportionally be at the lower end of comparable transactions.
The sources, who asked not to be identified because the negotiations are confidential, cautioned that the break-up fee and other aspects of the deal have not been finalized, and that the companies were still waiting for the Treasury to unveil its updated rules on inversions.
Pfizer and Allergan both declined to comment.