The deal is valued at $363.63 per Allergan share.
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The merger of the companies would make Pfizer-Allergan the largest pharmaceutical company in the world and could allow Pfizer to shift its corporate residence overseas to receive a tax break.
Read will become the chief executive of the new Pfizer plc, while Saunders will become chief operating officer with oversight of all Pfizer and Allergan’s combined commercial businesses, manufacturing and strategy functions. Pfizer plc will have its global operational headquarters in NY 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”, Saunders said.
The deal might have been described as a mega-merger in the pharma industry, but some of the leading analysts and pharma company executives in India told Business Today it doesn’t hold much ground for Indian pharma companies.
In this case, the deal is structured so that Allergan is technically the purchaser, even though Pfizer is the larger company.
The deal comes about 18 months after the failure of Mr Read’s initial attempt at an inversion, a $118bn bid to acquire Britain-based AstraZeneca that ran into staunch opposition from that company’s management and United Kingdom politicians. A wholly owned subsidiary of Allergan will be merged with and into Pfizer, and subject to receipt of shareholder approval, the Allergan parent company will be renamed “Pfizer plc” after the closing of the transaction.
THE CONCLUSION of a record-breaking deal between pharmaceutical companies Pfizer and Allergan has been labelled a “disaster” by US Democrat presidential candidates Bernie Sanders and Hillary Clinton amid fears it could resurrect the prospect of tax inversions.
The merger has raised concerns from consumer advocates about higher drug prices resulting from decreased competition in the industry.
“The Irish sites manufacture many of both companies’ top medicines for global export and these are growth areas for the company”, he said.
Supply chain heads for both companies should be ready for some serious reconfiguration if the deal breaks through. Last week the Treasury Department and the Internal Revenue Service announced stricter rules to restrict such practice further in future.
The final terms of the deal include 11.3 Pfizer shares for every Allergan share, the Journal said, citing unidentified sources.
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It could end up being the world’s second-largest merger, following British telecom company Vodafone’s purchase of Germany’s Mannesmann for $239 billion, including debt, in 1999.
