The Wall Street Journal article released on April, 29th, “Pfizer Sees Tax Savings From Deal, Leaving U.S.” disturbed me. It insinuated Pfizer’s attempted takeover of AstraZeneca was to help the company slash its tax bill, saving $1 billion or more each year. These transactions known as “inversions” require companies to transfer at least 20% of their shares to foreign ownership. When they do, they qualify to establish new legal homes in lower-tax regimes abroad. Now, I ask you what do you think is wrong with this picture? Well, a few things; however one, in particular, we see in our business all the time. Why do so many companies seem only to crunch the tangible numbers when doing their due diligence on a merger or acquisition/takeover? More often than not, there seems to be very little regard for the important intangibles of people and culture.
For more on this topic, check out our insight on maximizing value from an M&A deal.