World’s Biggest Pharma Deal: Allergan and Pfizer Combining to Form $160 billion Company
Bengaluru, India | Red Newswire | Nov 23, 2015 Last Updated at 09:04 PM IST.
The two pharmaceutical giants of the world – Pfizer and Allergan have made it official that they are combining to form a huge $160 billion drug company.
As payment Allergan shareholders will receive $363.63 of Pfizer stocks. To be more specific, investors will get 11.3 shares of the new company for each share of Allergan.
The combined business will be known by the name Pfizer plc. However, legally all will be termed under Allergan plc. The management said, “Upon the closing of the transaction, the combined company is expected to maintain Allergan’s Irish legal domicile.”
This kind of deals are usually called as tax inversion and are being embraced by many US companies as it helps them to dodge heavy US tax by moving to regions with low tax rates like Ireland.
For Pfizer it would save billions of dollars. Management further added, “Pfizer anticipates the transaction will deliver more than $2 billion in operational synergies over the first three years after closing. Pfizer anticipates that the combined company will have a pro forma Adjusted Effective Tax Rate of approximately 17%-18% by the first full year after the closing of the transaction.”
The new company will keep trading on NYSE under PFE ticker.
Ian Read, CEO of Pfizer said, “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.”
The deal will result in a new world class biopharmaceutical leader and would combine innovation pipeline. The deal will close in latter half of 2016.