Pfizer and Irish rival Allergan agree record $160bn merger
US giant drugmaker Pfizer said it had agreed to merge with Irish rival Allergan in a deal worth US$160bn, making it the biggest deal in pharmaceuticals history.
The firms said the merger would create an industry leader that would have more than 100 treatments in mid to late stage development.
Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer investors will receive one share of the combined company for each of their Pfizer shares.
Last year Anglo-Swiss rival AstraZeneca fought off a £69bn takeover bid from US rival Pfizer, saying the bid undervalued the business.
The merger is also the largest so-called inversion deal in corporate history, a tax-saving manoeuvre in which a US company reorganises in another country with a lower corporate tax rate.
The US corporate tax rate of 35% is one of the highest in the world, and compares with Ireland’s rate of 12.5%.
US efforts to curb the practice have so far proven ineffective.
Botox maker Allergan is based in Dublin, but runs much of its operations out of New Jersey in the US.
The combined business, which will be named Pfizer, will be legally domiciled in Ireland, but will have its global operational headquarters in New York.
Pfizer chairman and chief executive Ian Read said: “The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world.”
Allergan chief executive Brent Saunders said the deal brought together “two biopharma powerhouses”.
Mr Saunders added: “This bold action is the next chapter in the successful transformation of Allergan, allowing us to operate with greater resources at a much bigger scale.”
Pfizer said the addition of Allergan’s treatments in areas such as eye care, neuroscience and dermatology will see the combined group sales “significantly enhanced”.
Allergan is best known for its Botox treatment, but also makes Alzheimer’s drug Namenda and dry-eye medication Restasis.
The firms said they expected the deal to complete in the second half of next year, subject to regulatory approval in the US and the European Union.
Pfizer shareholders will hold 56% of the combined firm, with the rest owned by Allergan investors.
The deal values Allergan’s shares at US$363.63 each, just over a 16% premium compared with the stock’s closing price on $312.46 on Friday.
