Business this week
Pfizer called off its $160 billion merger with Allergan after the US Treasury proposed new rules that would severely curtail the benefits of “inversion” takeovers (where an American company buys a foreign one in order to reduce its corporate-tax bill). Allergan is listed in New York but has its corporate headquarters in lower-taxed Ireland, which is where Pfizer would have based the newly combined company. Such deals have become politically toxic in America, but the White House denied that the new regulations were intended specifically to scupper the Pfizer-Allergan deal.
America's Justice Department filed a lawsuit to stop the $25 billion merger of Halliburton and Baker Hughes, the world's second- and third-largest oilfield-services companies, citing antitrust concerns. The merger was announced in November 2014 but opposed by some big oil companies. They worried that diminished competition in oil services would put a further squeeze on profits already hit by the fall in oil prices.
The share prices of big French telecoms companies plunged following the collapse of a proposed 10 billion ($11.4 billion) merger between Orange (formerly France Telecom) and Bouygues.
The negotiations failed to resolve differences over the value of the deal and the French government's 23% stake in Orange.
The Reserve Bank of India cut its benchmark interest rate from 6.75% to 6.5%, the lowest it has been in five years.Inflation, usually a headache for the central bank, has eased.
A new fiduciary rule on financial advice was published by the American government. From now on almost anyone giving investment advice will be required to act in the best interest of their clients. They previously had to ensure they were giving only suitable advice.
Anbang, a Chinese insurance company that has been buying hotel assets overseas, dropped its bid for Starwood Hotels, which counts the Sheraton and Westin chains among its brands.Marriott had already struck a deal to take over Starwood before Anbang launched its rival offer.
A flutter of consolidation among America's smaller airlines looked likely after Alaska Airlines agreed to buy Virgin America in a $4 billion deal.The new carrier will become America's fifth-largest. Virgin America was started by Richard Branson in 2004.