Ask Matt: Is Pfizer a better investment now?

Q: Is Pfizer a better investment now?

A: Pfizer's (PFE) complicated plan to be bought by rival Allergan (AGN) is partially a way to save on U.S. taxes. Whether that's good for America is up for debate. But it's possibly a good move for investors.

Monday, drugmaker Pfizer said it was combining with Ireland-based Botox maker Allergan in a $160 billion deal. The company says the deal, structured as a purchase of Pfizer by Allergan, would boost its product pipeline in addition to create tax benefits. The tax portion of the deal is controversial. U.S. policymakers are working to block corporate mergers where U.S. companies set themselves up to be bought by companies in countries with lower tax rates. But those rules are unlikely to stop this deal.

The resulting deal with Pfizer is a potential boon for investors in the company - which becomes the most valuable drug company in the world. Pfizer's effective tax rate of 24.5% is higher than some of its rivals in Europe. Analysts remain bullish on Pfizer following the deal. Analysts on average rate the stock an "outperform" and think it could be worth $40.06 a share in 18 months. If that's correct, it would be 28% potential upside. The deal could also give Pfizer a much-needed growth jolt.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.