Pfizer to buy Allergan for $160 billion

Two of the country’s biggest employers are to merge after drugs giants Pfizer struck a record-breaking $160bn deal to buy Allergan that will cut its global tax bill by moving its headquarters to Ireland.

Pfizer and Allergan have announced a $160-billion drug maker merger that will make them the largest drug makers in the world.

“One business would focus on newer products, such as Pfizer’s breast-cancer drug Ibrance and Allergan’s blockbuster Botox, and have sales the companies project will grow in the double digits”, said the newspaper.

In what would be the biggest inversion ever, New York-based Pfizer could save hundreds of millions in US taxes annually because it would move its tax headquarters to Ireland, where Allergan is based.

Read, who has long sought to slash Pfizer’s USA tax rate, said in a statement that the deal would help put the company on “on a more competitive footing”.

Ian Read, the CEO of Pfizer (NYSE:PFE), said in a statement that this merger with Allergan, Pfizer (NYSE:PFE) will have acquired more financial flexibility which would ensure it locating and developing new drugs for patients for better recovery, and at the same time, it would be able to provide huge returns to shareholders.

Those changes weren’t enough to keep Pfizer and Allergan from merging in the largest inversion-type deal so far by a USA company.

Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share of the combined company for each of their Pfizer shares.

Last year, Anglo-Swiss rival AstraZeneca fought off a £69bn takeover bid from United States rival Pfizer, saying the bid undervalued the business.

President Obama and members of Congress from both political parties have complained about companies using the maneuver to lower how much they pay in US taxes.

Allergan CEO Brent Saunders will be president and chief operating officer.

Clinton also said that she would propose specific steps in the coming weeks to prevent corporate inversions, “which take advantage of loopholes that litter our tax code, distort incentives for investment and disadvantage small businesses and domestic firms that can not game the worldwide tax system”.

Others were disappointed by other aspects of the deal, including the projected cost savings, and a lack of details on potentially increased share buybacks.

On a conference call with analysts, Pfizer said the merger would give it enhanced access to its tens of billions of dollars parked overseas over time and allow for more share buybacks and dividend payments.

More than 50 similar deals, called inversions, have been done over three decades by well-known companies such as Medtronic, Fruit of the Loom and Ingersoll Rand.

Democratic presidential candidate Martin O’Malley opposed the deal, too.

Allergan shareholders would own 44% of the new company while Pfizer investors would own 56%.