Pfizer, the research-based pharmaceutical company has announced to buy Allergan plc for approximately USD 160 billion.
The company said, "The boards of directors of both the companies have unanimously approved to entered into a definitive merger agreement under which Pfizer will combine with Allergan."
The transaction is valued at USD 363.63 per Allergan share based on the closing price of Pfizer common stock of $32.18 on November 20, 2015.
According to the agreements of the transaction, the 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.
The transaction represents more than a 30% premium based on Pfizer's and Allergan's unaffected share prices as of October 28, 2015.
Pursuant to the terms of the merger agreement, the Allergan parent company will be the parent company of the combined group. A wholly owned subsidiary of Allergan will be merged with and into Pfizer, and subject to receipt of shareholder approval, the Allergan parent company will be renamed 'Pfizer plc' after the closing of the transaction.
Ian Read, chairman and chief executive officer, Pfizer said, "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's innovative businesses will be significantly enhanced by the addition of a growing revenue stream from Allergan's durable and innovative flagship brands in desirable therapeutic areas such as aesthetics and dermatology, eye-care, gastrointestinal, neuroscience and urology.
Pfizer anticipates the transaction will deliver more than USD 2 billion in operational synergies over the first three years after closing of the transaction. The company anticipates that the combined company will have a pro forma adjusted effective tax rate of approximately 17% - 18% by the first full year after the closing of the transaction.
The transaction is expected to be completed in the second half of 2016, is subject to
certain conditions, including receipt of regulatory approval in certain jurisdictions, including the United States and European Union, the receipt of necessary approvals from both Pfizer and Allergan shareholders, and the completion of Allergan's pending divestiture of its generics business to Teva Pharmaceuticals, which Allergan expects will close in the first quarter of 2016.
Shares of the company gained Rs 89.55, or 3.67%, to trade at Rs 2,527.00. The total volume of shares traded was 38,335 at the BSE (1.15 p.m., Tuesday).
