If it comes to fruition, the combination of Pfizer Inc. and Allergan PLC will create the world’s largest drugmaker. But U.S. politicians have railed against the $160 billion inversion deal, which would move Pfizer to Ireland, where the company can take advantage of a lower tax rate.
Enter David Lam, who is representing Pfizer. He’s structured the deal in such a way that if lawmakers enact legislation that would make the combined company a U.S. corporation, either company can pull out and pay an uncommonly low breakup fee—no more than $400 million. (Should one of the companies kill the deal for some other reason, the fee could climb to as much as $3.5 billion.)
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