Congress Must Act Now, Pfizer Leaving America And Many More To Follow by Carl Icahn.
Carl C. Icahn
767 Fifth Avenue, 47th Floor
New York, New York 10153
GrizzlyRock Value Partners was up 16.6% for the first quarter, compared to the S&P 500's 5.77% gain and the Russell 2000's 12.44% return. GrizzlyRock's long return was 22.3% gross, while its short return was -2.9% gross. Compared to the Russell 2000, the fund's long portfolio delivered alpha of 10.8%, while its short portfolio delivered alpha Read More
Dear Senators and Congressmen,
Unfortunately, my warnings concerning the fact that there will be a large number of our companies leaving the country within the next year is already coming true. Just this morning, both Pfizer and Allergan confirmed they are in “preliminary friendly discussions” about merging. Allergan is domiciled in Ireland, and if consummated, this will be the largest corporate inversion to date, and as a result our country will lose Pfizer, its tenth largest company. The imminent planned exodus of many of our best companies is extremely dangerous, especially in our fragile economy, as it will cause the loss of thousands of jobs, as well as hundreds of billions of dollars of future tax revenue and investment in the United States. As I said in my October 20th letter, it’s not too late if we act now.
I would like to thank the many of you who called me to voice your support for my October 20th letter in which I announced my $150 million PAC and expressed my strong opposition to corporate tax inversions. I found it encouraging that every single member of both the House and the Senate to whom I spoke, both Republicans and Democrats, agreed with strong conviction that inversions present a grave risk to our country in the near term, and also agreed that the framework proposed by Senator Chuck Schumer and Senator Robert Portman, and supported by Speaker Paul Ryan, for international tax reform would put an end to these inversions. Given the news this morning that we are now losing Pfizer, one of the pillars of our pharmaceutical industry, to corporate inversion, we must act now.
The Highway Bill presents an immediately available opportunity to pass international tax reform that will stop inversions. In the conversations I had with many of you, there was universal agreement on this fact as well. But our window of opportunity is shrinking. The most recent short-term extension to the Highway Bill gives us only until November 20th to pass a long-term Highway Bill that includes the international tax reform necessary to stop further inversions. If a version of the Highway Bill passes without including this necessary tax reform, I fear we will lose many more iconic companies, such as Pfizer, in the months to come.
The House Transportation and Infrastructure Committee recently drafted a multi-year Highway Bill, but this bill does not include any funding from international tax reform and therefore has only three years of guaranteed funding. The Chairman of this committee, Congressman Bill Shuster, unequivocally expressed to me that he would prefer passing a six-year bill with incremental guaranteed funding sourced from international tax reform.
If all the above is true, then why is the Schumer/Portman framework not already included in the Highway Bill? It is my understanding that Speaker Paul Ryan, formerly Chairman of the Ways and Means Committee, and now Speaker of the House, continues to work with Senator Chuck Schumer and Senator Rob Portman on the details of applying their framework to the Highway Bill, and that they are actually very close to a deal, the terms of which will be acceptable to both parties.
As is so often the case, time is of the essence. I again thank you all for your support and ask you to do all you can to help this legislation get across the finish line. I honestly believe the future of our country hangs in the balance.