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Pfizer to acquire Allergan for $160 billion

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Blockbuster deal would be biggest ever in health care arena


NEW YORK and DUBLIN, Ireland — Pfizer Inc. plans to acquire Allergan Inc. for about $160 billion in the biggest deal ever in the health care sector.

Pfizer said Monday that the transaction will allow the New York-based drug giant to relocate to Ireland to cut its U.S. tax burden.

“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 chairman and chief executive officer Ian Read said in a statement. “Allergan’s businesses align with and enhance Pfizer’s businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth. Through this combination, 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.”

allergan_pfizer logosAllergan shareholders will receive 11.3 shares of the combined company — to be called Pfizer PLC — for each Allergan share. Current Pfizer shareholders will receive one share of the new company for each share they own.

Pfizer and Allergan had confirmed late last month that they were in discussions about a possible combination. The deal, expected to close in the second half of next year, could spark political debate because Pfizer would redomicile to Ireland, where Allergan is registered, in a so-called inversion that would slash its corporate tax rate.

“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,” stated Brent Saunders, CEO of Allergan. “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. Joining forces with Pfizer matches our leading products in seven high growth therapeutic areas and our robust R&D pipeline with Pfizer’s leading innovative and established businesses, vast global footprint and strength in discovery and development research to create a new biopharma leader.”

Plans call for Read, 62, to be CEO of the combined company, with Saunders, 45, serving in a senior role focused on operations and the integration. Saunders will also have a seat on the combined company’s board.

Pfizer said its innovative businesses will be significantly enhanced by the addition of a growing revenue stream from Allergan’s flagship brands in therapeutic areas such as aesthetics and dermatology, eye care, gastrointestinal, neuroscience and urology. The combined company also stands to benefit from a broader portfolio of leading medicines in key categories and a platform for sustainable growth with diversified payer groups, Pfizer added.

With the addition of Allergan, Pfizer said it also will enhance its R&D capabilities in new molecular entities and product line extensions. A combined pipeline of more than 100 mid-to-late stage programs in development and greater resources to invest in R&D and manufacturing is expected to sustain the growth of the business over the long term, the company noted.

The combination of Pfizer and Allergan will boost the scale of Pfizer’s established business, and their complementary capabilities will maximize the combined established portfolio, the companies said. The addition of Allergan’s women’s health and anti-infectives portfolio, too, will add depth to Pfizer’s established business, and Pfizer will expand the reach of Allergan’s established portfolio using its existing commercial capabilities, infrastructure and global scale. In addition, Allergan brings topical formulation, manufacturing and its Anda distribution capabilities to the combined company.

Pfizer said that with the combination with Allergan and the subsequent integration of the two companies, it now expects to make a decision about a potential separation of the combined company’s innovative and established businesses by no later than the end of 2018.

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