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Global report: Pfizer buys Allergan

ian read photo forbes

In the end of November, Pfizer acquired Allergan for more than $150 billion, a deal which will create the world’s biggest drug maker.

The deal, the largest ever in the healthcare sector, involves Pfizer paying with 11.3 of its shares for each Allergan share. There will also be a small cash component, accounting for less than 10 percent of the value of the deal.

The takeover would be the largest so-called inversion ever. Such deals enable a U.S. company to move abroad and take advantage of a lower corporate tax rate elsewhere, and have remained popular in the face of U.S. efforts to curb them. The headquarter will be shifted to Dublin, Ireland.

Pfizer Chief Executive Ian Read will lead the combined company with Allergan CEO Brent Saunders serving as his No. 2, according to Reuters. Other Allergan executives are expected to join the firm too. It is not immediately known how many jobs would be lost as a result of the merger.

The combination would provide access to about 70 additional worldwide markets for Allergan products, such as Botox wrinkle treatment, Alzheimer’s drug Namenda and dry-eye medication Restasis. Still, according to Reuters, investors had hoped Pfizer would sell off the lower-margin business in 2017, a move now put off by the time required to integrate Allergan.

Allergan would be the fourth huge acquisition over the last 15 years for Pfizer – one for each of the last 4 CEOs – following purchases of Warner-Lambert, Pharmacia and Wyeth. The deal is expected to close in the second half of 2016.