Current Allergan shareholders will own 44 percent of the combined company, while Pfizer shareholders will own 56 percent.
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2014: Medtronic Inc. buys Covidien Plc for $49.66 billion (completed).
On Monday, the White House declined to comment on Pfizer’s acquisition of Allergan, but said U.S. lawmakers should take legislative steps to prevent deals where companies lower their taxes by reincorporating overseas. Regulatory obstacles, the threat of terrorism and even the USA presidential election could further subdue activity. Allergan stockholders will receive 11.3 shares in the new company for each share of Allergan, while Pfizer stockholders will get 1 share for each Pfizer share.
A month ago, Allergan, which is based in Ireland and has a sizable operation in Irvine, Calif., said it was approached by New York-based Pfizer but cautioned that there was “no certainty” that the “friendly” discussions would lead to a merger.
The combined companies will be rebranded to Pfizer Plc, but legally, the merged company will be combined under Allergan Plc.
Apart from male libido drug Viagra and cholesterol drug Lipitor, Pfizer’s major drugs include nerve pain treatment Lyrica and Prevnar, a treatment for pneumonia.
On Sunday, the boards of drugmakers Allergan and Pfizer approved a $150 billion merger agreement that would make the combined company the largest drugmaker, by revenue, in the world, the NY Times’ “Deal B%k” reports (de la Merced, “Deal B%k”, NY Times, 11/22).
“The fact that Pfizer is leaving our country with a tremendous loss of jobs is disgusting”, he said in a statement to Business Insider. “This proposed merger, and so-called “inversions” by other companies, will leave USA taxpayers holding the bag”.
“We can not delay in cracking down on inversions that erode our tax base”, the former USA secretary of state said in a statement.
Pfizer’s chief executive Ian Read will be CEO of the combined company, while Allergan CEO Brent Saunders will be chief operating officer. The companies will combine under Allergan plc and retain Allergan’s legal and tax domicile in Ireland, but will be renamed Pfizer plc. This seemed to support pre-deal speculation that Saunders was being viewed as a potential successor to Read, who’s 15 years older than Saunders. Together, barring any divestitures, the companies would be the biggest pharmaceutical company by annual sales, with about US$60 billion.
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Pfizer shares were down 7.74% at $31.62 before US financial markets opened. The company is reportedly considering splitting the merged firm into two businesses in the coming years, in order to separate drugs that are still protected by patents from those that have to compete with generic alternatives of the same medicines.
