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Pfizer, Allergan to combine in $160 billion deal
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Pfizer and Allergan announced today that their boards of directors have approved a definitive merger agreement in which Pfizer will combine with Allergan.
The merger has a stock transaction currently valued at $363.63 per Allergan share, for a total value of approximately $160 billion, based on the closing price of Pfizer common stock of $32.18 on Nov. 20, according to a press release from both companies. Under the proposal, the businesses of Pfizer and Allergan will be combined under Allergan plc, which will be renamed Pfizer plc.
It is expected that shares of the combined company will be traded on the New York Stock Exchange under the “PFE” ticker, according to the release. The combined company will “maintain Allergan’s Irish legal domicile,” with Pfizer having its global operating headquarters in New York and its principal executive offices located in Ireland, the release reported.
The merger represents a 30% premium based on Pfizer’s and Allergan’s unaffected share prices as of Oct. 28, according to the release. Allergan shareholders will receive 11.3 shares of combined company stock for each Allegan share, while Pfizer shareholders will receive one share of combined stock for each Pfizer share.
“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,” Ian Read, chairman and CEO of Pfizer, said in the release. “Allergan’s businesses align with and enhance Pfizer’s businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth. … Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry.”
“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,” Brent Saunders, CEO of Allergan, said in the release. “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.”
Pfizer reported in the release that its businesses will be enhanced by the addition of Allergan’s flagship brands in aesthetics and dermatology, eye care, gastrointestinal, neuroscience and urology. There is a combined pipeline of more than 100 mid- to late-stage programs in development, according to the release.
Pfizer expects to make a decision about potential separation of the combined company’s established businesses by the end of 2018, according to the release.
References: www.pfizer.com, www.allergan.com
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John A. Hovanesian, MD, FACS
The proposed merger between Pfizer and Allergan may have great benefits for patients, surgeons and the eye care industry. While the transaction is not yet fully approved by regulators, it would form the world's largest pharmaceutical company. To have such a company with eye care as a major focus and a stated commitment to innovation portends very favorably for the years ahead.
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