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Pfizer, Allergan to merge in 160-billion-dollar tax inversion deal

Xinhua, November 24, 2015 Adjust font size:

U.S. drug giant Pfizer Inc. and its Irish rival Allergan PLC announced on Monday a merge deal worth up to approximately 160 billion U.S. dollars that would create the world's largest pharmaceutical giant.

The transaction represents more than a 30 percent premium based on the two companies' unaffected share prices as of Oct. 28, 2015. Allergan shareholders 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.

"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," said Ian Read, chairman and chief executive officer of Pfizer.

The takeover would be the largest inversion ever, moving one of the top corporate names in the United States to a foreign country, the Wall Street Journal reported. 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.

Under the terms of the proposed transaction, the businesses of New York-based Pfizer and Dublin-based Allergan will be combined under Allergan PLC, which will be renamed "Pfizer plc." The companies expect that shares of the combined company will be listed on the New York Stock Exchange and trade under the "PFE" ticker.

The combined company is expected to maintain Allergan's Irish legal domicile, to help secure a lower tax rate. Pfizer plc will have its global operational headquarters in New York and its principal executive offices in Ireland.

"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," said Brent Saunders, chief executive officer of Allergan PLC.

The combination of Pfizer and Allergan will significantly increase the scale of Pfizer's established business, and their complementary capabilities will maximize the combined established portfolio, analysts said.

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. Endit