If completed, it would cap a remarkable consolidation wave roiling the USA healthcare industry and create the world’s biggest drug maker by sales.
Advertisement
(AGN) are set to strike a merger deal worth more than $150 billion, the Wall Street Journal reported citing people familiar with the matter.
It said Pfizer Chief Executive Ian Read would lead the combined company and that Allergan CEO Brent Saunders would be second-in-command.
The takeover would be the largest so-called inversion ever.
Pfizer is said to be negotiating an offer of between $370 and $380 per Allergan share, valuing the company at $150bn. The combined entity is then expected to evaluate splitting into two businesses – one focused on patent-protected products and the other on drugs that have already lost it (or are close to). With the move, the new company would cut its corporate tax range from 15% to 39% in the U.S. to 12.5% in Ireland.
Experts noted that the moves of the US Treasury department to clamp down on inversion deals are unlikely to scuttle the deal now under negotiations between the two sides in what appears to be friendly settings. While generating big profit margins for its overseas arm, the practice has allowed Pfizer to report losses on its higher-taxed USA business in each of the past five years.
Advertisement
Saunders has had a meteoric rise in the industry over the past five years, turning around eye-care company Bausch & Lomb and also leading Forest Laboratories and Swiss drugmaker Actavis, which took the Allergan name after acquiring it this year.
