Pfizer, Allergan to merge

NEW YORK and DUBLIN — Pfizer and Allergan announced Monday that they would be merging in a deal valued at about $160 billion. Under the deal, Allergan’s shareholders will receive 11.3 shares in the combined company for each of their Allergan shares, and Pfizer shareholders will receive one share for each Pfizer share they own.

 

“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,” Pfizer CEO and chairman Ian Read said. “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 companies will be combined under Allergan’s parent company, which will be renamed “Pfizer plc,” and the transaction is expected to close in the second half of 2016 following regulatory approval in the United States and European Union and Allergan’s sale of its generics arm to Teva. 

 

A 15-member board composed of Pfizer’s 11 directors and Allergan’s four directors will govern the combined company. Read will assume the position of CEO of the combined company and Allergan CEO Brent Saunders will be the president and COO. 

 

“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,” Saunders said. “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.”

 

The combined company will see Pfizer’s offerings bolstered by Allergan’s positiong in such therapeutic areas as eye care, dermatology, neuroscience, urology and aesthetics. It will also have a pipeline of more than 100 programs in mid- and late-stage development. 

 

Pfizer expects the deal to create some $2 billion in synergies in the three years after it closes and expects it to be accretive to its earnings starting in 2018, the year when it is expected that operating cash flow will exceed $25 billion.