That’s because the deal is set up as an asset purchase, and J&J is paying with cash. That makes the purchase price tax-deductible to J&J. The deal is taxable to Pfizer–but as we’ll see, J&J’s tax savings exceed Pfizer’s tax costs.

By my math, J&J stands to save $440 million in federal and state income taxes annually for 15 years. I’m using my own numbers because J&J wouldn’t provide any. All J&J would tell me, through a spokesman, is: “We’ve assumed there will be a tax benefit associated with the amortization [deductibility] of a significant portion of the purchase price.”

Even though J&J stands to save an indicated $6.6 billion in taxes over time, you can’t compare that number with the $16.6 billion purchase price, because getting money over a decade and a half isn’t the same as getting it today. So you have to calculate today’s value of those future savings. If you run this through a spreadsheet program, those tax breaks are worth $4.3 billion–more than a quarter of the purchase price–if you use a conservative 6 percent interest rate. If you use 5 percent, the tax break is worth $4.6 billion.

I’m using rates suggested by Robert Willens, Lehman Brothers’ tax expert. “This is the biggest asset purchase I’ve ever seen,” says Willens, whose firm isn’t involved in the deal. Willens says that since 1993, buyers have been allowed to deduct the value of “intangible assets,” such as brand names and good will, that are bought in cash deals. He says such assets account for essentially the entire purchase price in this case. “Once Pfizer decided it wanted to sell those businesses for cash, making the transaction an asset purchase was the obvious way to proceed,” he says.

You wouldn’t know anything about tax savings from reading J&J’s announcement of the Pfizer purchase. You wouldn’t know it from listening to the company’s conversations with Wall Street, either. I listened to almost three hours of J&J meetings with analysts–one meeting discussing the deal itself, the second talking about the deal and J&J’s second-quarter profits–and didn’t hear a single mention of tax savings.

Willens put out a report the day after the June 26 deal was announced, saying that tax breaks would offset a big piece of J&J’s cost. But this doesn’t seem to have penetrated Wall Street, where the deal is being criticized in some quarters as being too expensive. J&J is paying a whopping four times Pfizer Consumer Healthcare’s annual sales and 21 times operating profits. But the tax-adjusted cost is about three times sales and 15 times operating profits. One reason the stated price is so high is that in deals like this, the buyer and the seller typically split the tax savings, with the buyer paying more than it would pay in a non-tax-advantaged deal and the seller ending up better off, too. Think of it as tax techies dividing up a pie.

Unlike some tax-efficient deals I’ve written about, in this case we regular taxpayers won’t be taking a total beating. Pfizer says it will pay about $3.1 billion in income taxes on the sale. That’s less than J&J is saving–but at least someone is paying serious tax.

Other asset buyers–including the New York Times Co. (which spent $410 million for About.com in 2005) and Media General ($600 million for four TV stations this year) –were clear about their tax savings, so Wall Street could see the true cost of the assets. The Times Co. put the savings at more than 20 percent of the purchase price, and Media General (in which I have a small stock holding) put them at 25 percent.

Why isn’t J&J being equally upfront? Maybe it worries more about getting called a “tax avoider” by people like me than it worries about letting investors know the true economics of its Pfizer purchase. Maybe it figures Wall Street, obsessed with earnings per share, wouldn’t understand tax synergy. Maybe there’s some other reason. I don’t know, because the company won’t tell me.

In the 1980s, J&J used to be famous for forthrightness. Something seems to have changed at the company since then. Too bad for J&J, too bad for us.