Pozen, which announced in June plans to reincorporate in Ireland after acquiring a Canadian pharmaceutical company, is reconsidering that move.
The Chapel Hill company and Tribute Pharmaceuticals Canada announced Tuesday that they are now considering locating the combined company, which is to be named Aralez Pharmaceuticals, in Canada.
The change is a response to new U.S. Treasury Department guidelines that are designed to make it more difficult for companies to perform so-called corporate tax inversions. An inversion is when a company acquires a company based in a country with lower tax rates in order to reduce their tax burden.
Ireland, where the corporate tax rate is significantly lower, has been a favorite destination for pharmaceutical companies completing inversions in recent years.
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Pozen and Tribute say they remain committed to completing their transaction, which is expected to close in December. By incorporating in Canada, where Tribune is based, Aralez will be in compliance with the new Treasury Department guidelines, the companies said.
“A Canadian domicile will provide Aralez with a substantially similar tax efficient structure and compelling platform to execute our growth strategy,” Adrian Adams, Pozen’s CEO, said in a statement.
Pozen is acquiring Tribute for $146 million. Aralez is to become a specialty pharmaceutical company focused on cardiovascular treatments.