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Pfizer-Allergan Merger Valued at $160 Billion


Pharmaceutical Executive

November 24, 2015.

Pfizer and Allergan announced on Nov. 23, 2015 a merger of the two pharmaceutical giants valued at $160 billion that will establish the combined companies as the world’s largest drug maker, move Pfizer’s principal executive offices to Ireland, and cut the company’s tax bill. Global operational headquarters will be located in New York.

Under the proposed agreement, Allergan will be the parent company of the combined companies. A subsidiary of Allergan will be merged with Pfizer and the parent company will then be renamed Pfizer plc. The companies report that the transaction is expected to close in the second half of 2016, subject to regulatory approval in the United States and European Union, shareholder approval, Allergan’s divestiture of its generics business to Teva Pharmaceuticals, and other conditions.

The deal values Allergan stock at 16% more than the closing price on Nov. 20. Allergan shareholders would receive 11.3 shares in the new company for each Allergan share. Pfizer shareholders can receive cash to one share of the combined company stock for each Pfizer share; the aggregate amount of cash to be paid in the merger will be between $6 billion and $12 billion. If $12 billion of cash is paid in the merger, Pfizer estimates that the company’s stockholders will hold 56% of the combined company.

The board of the combined companies will have Pfizer’s 11 current directors and four current directors from Allergan. Ian Read, Pfizer’s current chairman and CEO, will serve in the same roles for the new Pfizer plc. Brent Saunders, current chief executive officer of Allergan, will serve as president and chief operating officer of the new company.

The merger with Allergan and integration of the two companies will delay a decision about a potential separation of the combined company’s innovator and generic businesses until “not later than the end of 2018,” the companies report.

Sources: Pfizer and Allergan




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