Will Pfizer Inc (NYSE:PFE) Still Enter A Bid for Astrazeneca?

Pfizer Inc (NYSE:PFE) is planning to acquire AstraZeneca. However, United State’s latest tax inversion policy has the potential of making the company double minded on its deal. According to the market researchers, even though the bid submitted by Pfizer Inc (NYSE:PFE) was not the highest one but the company was planning on submitting another bid.

The question that is in the minds of the people is as to what will happen now? The probability of company entering another bid has decreased significantly, but the possibility is still there.

One of the reasons why Pfizer Inc (NYSE:PFE) wanted to expand was that the company wanted to make an investment in the Oncology sector so that it could witness a growth. This decision of Pfizer was based on its revenue figures where it saw a 16 percent increase in the segment of oncology drugs during its third fiscal quarter. These figures were way higher than the numbers that the company reported during the first and second quarter. For the first 3 quarters of the year, the company has seen a growth of 13 percent in its oncology drug segment, which is the highest one in all of Pfizer’s business segments. It was only in the very recent quarter that the vaccine sales of Pfizer exceeded the oncology sales.

No doubt that the company wants to make its Oncology segment stronger, and for this purpose, it wants to acquire AstraZeneca. The benefits that the company will get, if this deal goes through, are far greater than the tax benefits.

The market analysts have given quite a high price target to the stocks of Pfizer Inc (NYSE:PFE).

Pfizer Inc (NYSE:PFE) could have gotten an opportunity to move its headquarters to United Kingdom if it had acquired AstraZeneca. This change in the headquarters would have resulted in huge savings since the earnings would have been boosted due to the lower tax rate.

The company can save up to $1 billion if it gets a 6 or 7 percent tax reduction, but the latest tax related policy of U.S. has made the situation complex.

The Treasury Department of the United States made these changes in the month of September. The market analysts are of the opinion that this decision of the United States’ Department of Treasury has been driven by the fact that a lot of the companies were using tax inversions in order to boost up their profitability, which in turn, was giving rise to low tax revenues.

The latest rules released by the Treasury Department make the acquisitions deal less profitable, and the companies that were previously planning on laying their hands on the offshore profits and cash will be affected by this rule the most. As for Pfizer Inc (NYSE:PFE), the company mostly keeps 10 to 30 percent of its money in the region of U.S. and hence the new rule can affect it adversely.

Coming to the stock price of Pfizer Inc (NYSE:PFE), the company, during the last trading session November 9, 2014, started its shares at a price of $30.18 and closed at a price of $30.32.