Pfizer, Allergan close to $150B merger deal

It’s a deal that could create a giant in pharmaceuticals and the world’s largest drug maker in sales.

Pfizer Inc. and Allergan PLC might announce an agreement as early as today to combine into a single new company, according to a person familiar with the matter.

The final terms of the deal include 11.3 Pfizer shares for every Allerganshare, the people said.

It said Pfizer Chief Executive Ian Read would lead the combined company and that Allergan CEO Brent Saunders would be second-in-command.

It would mark a peaking point for Irish firm Allergan’s history of tens of acquisitions and selloffs and provide the $45-billion Pfizer the tax benefits of an Irish domicile. And it would place the firms squarely in a presidential election debate over efforts by US companies to obtain lower tax rates by using mergers to move their headquarters overseas.

The deal, if concluded, will eclipse Pfizer’s $90-billion buyout of Warner Lambert in 2000. The tax rate in Ireland is 12.5 percent.

The deal, of course, comes days after Treasury issued new rules aimed at curbing such deals, but analysts say the new measures don’t put this particular merger at risk. But experts have said these moves would do little to prevent Pfizer from inverting. Generic competition is expected to cut Pfizers sales by $28 billion from 2010 through next year.

Saunders has had a meteoric rise in the industry over the past five years, turning around eye-care company Bausch & Lomb and also leading Forest Laboratories and Swiss drugmaker Actavis, which took the Allergan name after acquiring it this year.