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Allergan Drops as Treasury Plans to Deter Inversion Deals

Allergan Plc, the Ireland-based drugmaker in talks to be taken over by Pfizer Inc., dropped in late trading on plans by the U.S. Treasury Department to deter companies from doing deals to move their headquarters abroad for tax purposes.

Shares of Allergan slid 4.4 percent to $297 in extended trading. The company’s potential deal with New York-based Pfizer is predicated, in part, on giving the larger drugmaker a way to reduce its tax rate by becoming nominally Irish. Allergan’s principal executive offices are in New Jersey.

The Treasury Department is reviewing ways to address these overseas acquisitions and plans to issue guidance later this week to reduce the economic benefits of such deals, known as tax inversions, Secretary Jack Lew said in a letter to Senator Ron Wyden, the Oregon Democrat who’s the ranking member on the Finance Committee.

Pfizer shares were little changed at $33.20. The largest U.S. drugmaker said last month it was in “preliminary friendly...