Pfizer will spin-off its Upjohn subsidiary, calling it Newco. Next, Newco and Mylan will merge. Newco will be renamed “Viatris” (ticker symbol “VTRS”) and will operate both Mylan and Upjohn. This type of M&A transaction is called a Reverse Morris Trust. There are two stages, occurring on the same or subsequent days. The Distribution is first, followed by the Combination.
Via EX-99.1 Pfizer, Newco, Mylan: Explanatory Note:
Distribution: Pfizer will distribute all shares of Newco by
means of a spin-off. Newco common stock will be distributed on a pro rata
basis to Pfizer stockholders as of the record date of the Distribution.
Immediately following the Distribution, Newco and Mylan will engage in a
Combination transaction in which Mylan shareholders will receive shares of Newco common stock.
Which date is used to determine whether capital gains are short-term or long-term?
Via EX-99.1 Pfizer, Newco, Mylan: Material U.S. Federal Income Tax Consequences:
The holding period (for tax purposes) of any shares of Newco common
stock received (including any fractional shares of Newco common stock
deemed received and exchanged for cash...) by a U.S. Holder of
Pfizer common stock will include such holder’s holding period in such
Pfizer common stock at the time of the Distribution.
Capital gains (of non-corporate U.S. Holders, including individuals) will be eligible
for the preferential U.S. federal income tax rates applicable to
long-term capital gains if the U.S. Holder has held its Pfizer common
stock for more than one year as of the closing date of the