In a historic merger that will create the world's biggest drugmaker, US pharma giant Pfizer has agreed to buy Botox-maker Allergen in a USD 160 billion deal.
Pfizer and Allergan announced today that their "boards of directors have unanimously approved, and the companies have entered into, a definitive merger agreement under which Pfizer will combine with Allergan in a stock transaction... For a total enterprise value of approximately USD 160 billion," Pfizer said in a statement.
Under the terms of the proposed transaction, the businesses of Pfizer and Allergan will be combined under Allergan, which will be renamed 'Pfizer'.
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The companies expect that shares of the combined company will be listed on the New York Stock Exchange. The combined company is expected to maintain Allergan's Irish legal domicile and Pfizer will have its global operational headquarters in New York and its principal executive offices in Ireland.
Both companies have a good presence in India.
"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," Pfizer's Chairman and Chief Executive Officer Ian Read said.
"Allergan's businesses align with and enhance Pfizer's businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth.
"Through this combination, Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry," Read said.
Read will serve as the Chairman and CEO of the combined
company, while Allergan Chief Executive Officer Brent Saunders will serve as its President and Chief Operating Officer.
The merged company's board is expected to have 15 directors, consisting of all of Pfizer's 11 current directors and four current directors of Allergan.
The directors from Allergan will be its current Executive Chairman Paul Bisaro, Saunders and two other directors from the company, to be selected at a later date.
Pfizer anticipates the transaction will deliver more than USD 2 billion in operational synergies over the first three years after closing.
The combined company is expected to generate annual operating cash flow in excess of USD 25 billion beginning in 2018.
The deal is expected to be completed in the second half of 2016 and is subject to receiving regulatory approval in the United States and European Union and the completion of Allergan's pending divestiture of its generics business to Teva Pharmaceuticals, which Allergan expects will close in the first quarter of 2016.
According to the merger agreement, Allergan parent company will be the parent company of the combined group.
A wholly-owned subsidiary of Allergan will be merged with and into Pfizer, and subject to receipt of shareholder approval, the Allergan parent company will be renamed Pfizer.
Immediately prior to the merger, the Dublin and New Jersey based Allergan will effect an 11.3-for-one share split so that each Allergan shareholder will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share of the combined company for each of their Pfizer shares.
Pfizer's businesses will be significantly enhanced by the addition of a growing revenue stream from Allergan's flagship brands in therapeutic areas such as aesthetics and dermatology, eye care, gastrointestinal, neuroscience and urology.
With the addition of Allergan, Pfizer will enhance its R&D capabilities in both new molecular entities and product line extensions.
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A combined pipeline of more than 100 mid-to-late stage programmes in development and greater resources to invest in R&D and manufacturing is expected to sustain the growth of the innovative business over the long term, the companies said.
The addition of Allergan's Women's Health and Anti-Infectives portfolio will add depth to Pfizer's established business, and Pfizer will expand the reach of Allergan's established portfolio using its existing commercial capabilities, infrastructure and global scale.
"As a result of the combination with Allergan and subsequent integration of the two companies, Pfizer now expects to make a decision about a potential separation of the combined company's innovative and established businesses by no later than the end of 2018," Pfizer said.
"The combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction that brings together two biopharma powerhouses to change lives for the better," Saunders said.
"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.
"Joining forces with Pfizer matches our leading products in seven high growth therapeutic areas and our robust R&D pipeline with Pfizer's leading innovative and established businesses, vast global footprint and strength in discovery and development research to create a new biopharma leader.
