While no deals have been called off, announced and potential targets for deals in the pharmaceutical and healthcare industries saw their shares fall today, one day after the Treasury Department announced new rules to discourage such so-called inversions.
Doubt is already creeping into the minds of investors about the merits of future "inversion" deals one day after Treasury Secretary Jack Lew announced new rules to discourage U.S. companies from buying smaller overseas firms in order to relocate their headquarters and thus reduce their tax bill.
Today, in the first trading session since Lew announced the new rules, investors sold off shares of companies already involved in such deals and of companies that are rumored to be targets for future deals. While none of the multi-billion dollar deals have been called off yet, several pharmaceutical companies — where the inversion trend has been concentrated — saw their stock prices fall through early trading.
Covidien — down 2.51%, or $2.29, to $88.57.
Bloomberg
The Irish company announced in June that Minnesota-based medical device company Medtronic would take it over in a $43 billion deal. As part of the deal, the combined company's tax address would be in Ireland.
Mylan — down 3.34%, $1.58 to $45.78.
Bloomberg
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