Pfizer To Buy Allergan for $160 Billion: Forms Largest Pharmaceutical Company

US-based Pfizer and Ireland-based Allergan said Monday they will merge to create the world’s biggest pharmaceutical group in a deal worth about $160 billion.

FILE – This March 20, 2002 file photo shows a vial of Botox, made by Allergan, in Beverly Hills, Calif. Pfizer and Allergan have reached a $160 billion deal that creates the world¿s largest drugmaker by sales, the companies announced Monday, Nov. 23, 2015.

Allergan, best known for its anti-wrinkle treatment Botox, also makes Alzheimer’s drug Namenda and dry-eye medication Restasis.

The merger is a so-called inversion, in which USA companies looking to lower their tax bills combine with a company in a country with a lower tax rate. He said he expects a tax rate of about 18 percent after the deal, which compares to Pfizer’s current rate of 25 percent.

The deal must win approval of both European and US regulators before it can be completed.

New York-based Pfizer and Allergan, headquartered in Ireland, said yesterday that Pfizer would offer 11.3 of its own shares for each Allergan share.

US President Barack Obama meanwhile has called inversions unpatriotic.

According to Pfizer, the transaction should deliver more than $2 billion in operational synergies over the first three years after closing.

It is unclear how this deal will impact the companies’ agency relations.

The deal is a victory for Read, who in 2014 sought an inversion transaction with AstraZeneca, but was repeatedly rebuffed by the British company, which said Pfizer had undervalued its business.

There have been a number of mergers in the healthcare industry since the passage of the Affordable Care Act, which complicated the outlook for healthcare companies’ profits and revenue. The combined board will include all 11 current Pfizer directors and four current Allergan directors.

Mr Read will become the chief executive of the new Pfizer plc, while Allergan chief executive Brent Saunders will become chief operating officer with oversight of all Pfizer and Allergan’s combined commercial businesses, manufacturing and strategy functions.

Candidate for the democratic nomination in the 2016 United States presidential election, Hilary Clinton accused the company of using tax loopholes to avoid paying its “fair share”.

Pfizer is doing the largest inversion deal of all time.

“Republicans should stop trying to tilt the tax code even further in favor of the super wealthy and the largest corporations and join us in supporting these necessary reforms on behalf of USA taxpayers”, Clinton was quoted as saying.

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.