Pfizer seals the deal on Allergan takeover for $160bn

Viagra maker Pfizer has agreed to buy Allergan for $363.63 a share, or around $160bn in total, to seal what is effectively the largest ever healthcare deal.

Under the terms of the deal, which is expected to complete in the second half of next year, Allergan shareholders will receive 11.3 shares of the combined company for each of their Allegan shares, while Pfizer shareholders will receive one share for each of theirs.

The companies said in a joint statement that the transaction represents more than a 30% premium based on Pfizer’s and Allergan’s unaffected share prices as of October 28.

Brent Saunders, chief executive of Allergan, said: “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.

“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.”

Pfizer expects the deal to deliver more than $2bn in operational synergies over the first three years after closing.

The combined company is expected to generate annual operating cash flow in excess of $25bn beginning in 2018.

Pfizer’s chief executive Ian Read will become CEO of the combined company and Allergan’s CEO Brent Saunders will be chief operating officer.