Pfizer and Allergan on brink of $150 billion merger
pharmafile | November 23, 2015 | News story | Sales and Marketing |Â Â Â
Pfizer is reported to have secured formal board approval for a deal worth more than $150 billion to merge with Allergan.
Successful completion of the deal for the Ireland-based Botox-maker would represent a record sum for the pharma sector, which is expected to be formally announced later today.
Pfizer is believed to be paying 11.3 shares for each Allergan share combined with a cash payment to the value of around 10 percent of the total. It is also believed that the deal will be structured as a reverse merger, with Allergan technically buying Pfizer-the larger of the two companies.
Friendly merger talks between the two were first reported last month, and the deal appears to have sped towards conclusion, with Pfizer keen to complete it in advance of the US tightening its regulations on so-called tax inversions, whereby a company buys a rival based in a country with more favourable corporation tax laws and relocates its legal domicile there to take advantage.
In doing so, and relocating to Dublin, Pfizer is set to lower its tax rate from 25% to below 20%.
Sources familiar with the matter have said that Pfizer’s CEO Ian Read, 62, will take control of the combined companies- now the world’s largest drugmaker- while Allergan boss Brent Saunders, 45, will take the senior roles of president and chief operating officer. Saunders will also take a seat on the board and presumably will be seen as the natural successor when Read eventually steps aside.
The combined company will have a market value in excess of $320 billion, and an enviable product portfolio including Viagra, Celebrex and Juvéderm, as well as botox.
Neither company has as yet commented on the new reports.
UPDATE (23/11/15, 12:24 GMT): Pfizer and Allergan have confirmed a deal worth $160 billion.
Joel Levy
