Pfizer and Allergan have confirmed a $160 billion merger, unanimously approved by their boards of directors, creating the world’s largest pharmaceutical company.
The deal is currently valued at $363.63 per Allergan share, a figure which represents more than a 30% premium based on Pfizer’s and Allergan’s current share prices. Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares.
A statement confirmed the combined company- ‘Pfizer plc’- is expected to maintain Allergan’s Irish legal domicile, thus completing the much-debated tax inversion that will see Pfizer cut its corporation tax bill by some 5%, while keeping its global operational headquarters in New York.
Ian Read, chairman and CEO of Pfizer, says: “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’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.”
Allergan chief executive Brent Saunders comments: “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. 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.”
Read will continue as CEO at the newly-created Pfizer plc, while Saunders is expected to take up the positions of president and chief operating officer .
Pfizer said its innovative businesses will be significantly enhanced by the addition of Allergan’s “durable and innovative flagship brands” in therapeutic areas including aesthetics and dermatology, eye care, gastrointestinal, neuroscience and urology.
The company also expects to enhance its R&D capabilities in both new molecular entities and product line extensions, and sustain long-term growth with a combined pipeline of more than 100 mid-to-late stage programs in development and greater resources to invest in R&D and manufacturing.
Pfizer said it would make a decision about a potential separation of the combined company’s innovative and established businesses by no later than the end of 2018.
Some analysts believe Pfizer plans to split into two companies by 2018- one focused on high-end branded products, with the other concentrated on lower-margin generics.