Pfizer, Allergen merge in $160bn deal to create No 1 drug firm

Viagra maker Pfizer Inc and Botox manufacturer Allergan today agreed to merge in a record USD 160 billion deal, creating a drug making behemoth, in the biggest buyout in the healthcare sector.
The deal will technically see Dublin-based Allergan buying its much larger partner. It will allow New York-based Pfizer to shift base to Ireland for tax purposes.
Allergan shareholders will receive 11.3 shares in the combined company for each share held.
Pfizer investors will be able to opt for cash instead of stock in the combined company in exchange for their shares, provided the aggregate amount of cash to be paid is not less than USD 6 billion or more than USD 12 billion.

Ian Read, CEO of Pfizer will be chairman and CEO of the new company, while Allergan CEO Brent Saunders will be president and chief operating officer, overseeing sales, manufacturing and strategy, the companies said today.
The combined company is expected to generate annual operating cash flow in excess of USD 25 billion, beginning in 2018 with broadened innovative pipeline of more than 100 combined mid-to-late stage programmes in development.

As per the definitive merger agreement that has been approved by the Boards of the two companies, Pfizer will combine with Allergan in a stock transaction currently valued at USD 363.63 per Allergan share, for a total enterprise value of approximately USD 160 billion, Pfizer said in a statement.

The transaction represents more than a 30 per cent premium based on Pfizer's and Allergan's unaffected share prices as of October 28, 2015, it added.
The coming together of New York-based Pfizer, which manufacturers medications including Viagra, pain drug Lyrica and the Prevnar pneumococcal vaccine, and Allergan that produces Botox and the Alzheimer's drug Namenda, will make the biggest pharmaceutical company by sales, with about USD 60 billion in annual turnover.
The deal is bigger than Pfizer's 2000 purchase of Warner- Lambert Co for USD 116 billion.