Salix Pharmaceuticals Ltd.
(SLXP) and Italy’s Cosmo Pharmaceuticals SpA
(COPN) ended a $2.7 billion merger agreement, the first time a
U.S. company has blamed tougher rules for scrapping a plan to move
overseas for lower taxes, reports "Bloomberg".
Salix will make a $25 million payment to Lainate-based Cosmo, the companies said in a statement today. Raleigh, North Carolina-based Salix is in talks to sell itself to Actavis Plc (ACT), people with knowledge of the matter said yesterday.
The scrapped deal is the first evidence that rules adopted last month by the U.S. Treasury Department are succeeding in curbing cross-border, tax-reducing deals known as tax inversions that have helped drive a record period of industry mergers.
“The changed political environment has created more uncertainty regarding the potential benefits we expected to achieve,” Salix Chief Executive Officer Carolyn Logan said in the statement on the Cosmo deal.
Cosmo rose 7.7 percent to 154 Swiss francs at 9:39 a.m. in Zurich, giving the company a market value of 2.3 billion francs ($2.4 billion). The stock lost 8.3 percent yesterday after CNBC reported that Salix would end the agreement. Salix fell 2.3 percent to close at $151.09 yesterday.
The bank today kept the deposit rate at -0.20 percent and the marginal lending rate was maintained at 0.30 percent.
With favourable outcome by the end of 2014 we’ll get a whole new level of Forex market.