Allergan sinks after Treasury revises inversion rules

Allergan plc (NYSE:AGN) sank $60.55 (22%) to $217 in early after-hours trading Monday after the U.S. Treasury issued temporary regulations on tax inversions that could affect the company's pending merger with Pfizer Inc. (NYSE:PFE). In November, the companies agreed to a deal that would domicile the surviving company in Ireland, with Pfizer owning 56% of the entity. The revised rules could push Pfizer's ownership of the merged company above a 60% threshold beyond which the company would be subject to stricter tax liability.

The new revisions would exclude from Allergan's share base a basket of U.S. companies that Allergan acquired during the three-year stretch leading up to the Pfizer merger. As a result, Pfizer would essentially be merging with a smaller version of Allergan. ...