Monday, November 23, 2015

Pfizer seals $160bn Allergan deal; Attacks already hurting French economy; UK's permanent austerity -- Robbing poor to pay for the next crash

1 Pfizer seals $160bn Allergan deal (BBC) US drugs giant Pfizer has sealed a deal to buy Botox-maker Allergan for $160bn in what is the biggest pharmaceuticals deal in history. The takeover could allow Pfizer to escape relatively high US corporate tax rates by moving its headquarters to Allergan's Dublin base. The merged company will be the world's biggest drug maker by sales.

Hilliary Clinton, the likely Democratic presidential candidate, said inversion deals like Pfizer's would "leave US taxpayers holding the bag" and called on Washington to ensure that the biggest companies "pay their fair share". Senator Bernie Sanders, another Democratic hopeful, said the deal would be a disaster for consumers and allow another major US company to hide its profits overseas.

The merged business will be called Pfizer Plc. The companies said they expected the deal to be completed in the second half of 2016, subject to regulatory approval in the US and Europe. Pfizer said it expected the merger to result in savings of $2bn in the first three years. Pfizer boss Ian Read will be chief executive and chairman of the merged company, with Allergan boss Brent Saunders becoming president and chief operating officer.

Last year, Pfizer made an offer to buy AstraZeneca in a move that analysts said was designed to reduce Pfizer's tax bill. The UK drugs group rejected the bid, arguing it undervalued the company. The Pfizer-Allergan deal is the latest in a series of mergers and acquisitions in the sector, as pharmaceuticals companies struggle to cope with patents on a number of major drugs expiring.


2 Attacks already hurting French economy (San Francisco Chronicle) The attacks in Paris that killed 130 people and wounded hundreds more are hurting the French economy at a time when the wider 19-country eurozone appears to be growing at the fastest pace in four and a half years, a survey showed.

In a snapshot of business during November, financial information company Markit has found that service providers reported that the terrorist attacks in Paris had "negatively impacted on activity." Partly because of that, Markit said its purchasing managers' index for France — a broad gauge of economic activity — fell to a 3-month low in November of 51.3 points from 52.6 the previous month.

The drop takes the French economy nearer the 50 point level, which is the threshold separating economic expansion and contraction. The figures are prone to revision following further assessments, with the final results due in early December.

The French slowdown contrasts with the overall 19-country eurozone, which according to Markit is expanding at the fastest rate since 2011. The equivalent index for the eurozone rose to 54.4 points in November from 53.9 the previous month.


3 Permanent austerity – Robbing poor to pay for the next crash (Aditya Chakrabortty in The Guardian) Britain is now halfway through a transformative decade: staggering out of a historic crash, reeling through the sharpest spending cuts since the 1920s, and being driven by David Cameron towards a smaller state than Margaret Thatcher ever managed.

While much commentary still treats the Tories as merely muddling through a mess they inherited, George Osborne proudly promises a “permanent change” and “a new settlement” for the UK. The chancellor has the ambition, the power and the time – 10, perhaps 15 years in office – to do exactly that. Between 1979 and 1990 Thatcher permanently altered Britain and, going by what we already know, Osborne is on course to engineer a similar shift.

I think of the country we are morphing into as Austeria. It has three defining characteristics: it is shockingly unequal, as a deliberate choice of its rulers; it looks back to the past rather than investing in its future; and it has shrunk its public services for the benefit of its distended, crisis-prone banking sector.

Take unfairness. Remember Osborne’s promise, “we’re all in it together”? He is ensuring the opposite. Wanting to make massive cuts without rendering his party unelectable, the chancellor is deliberately targeting austerity at those sections of society where he calculates he can get away with it. Watch for them to be punished again on Wednesday, as the government looks to cut welfare and local government again.

The Austeria of 2020 is a country that has hacked back public spending in order to insure itself against another banking crash. In 2008 Britain’s bankers plunged the rest of the country into a crisis. What followed was austerity: the policy where those most responsible for the huge bill looked for the working and middle classes to pay for it. By the end of this decade, that policy will have become a regime, Austeria. In it most of us have to make do with less money in our pockets and dilapidated public services, to allow those at the top to continue as though nothing has happened. Because for them, very little has.


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