Pfizer and Allergan combine for broader therapeutic capabilities

Pfizer and Allergan have entered into a definitive merger agreement that will bring Pfizer into therapeutic areas such as dermatology, eye care, gastrointestinal, neuroscience and urology

Under the agreement Pfizer will combine with Allergan in a stock transaction currently valued at £240.53 ($363.63) per Allergan share, for a total enterprise value of approximately £105bn ($160bn), based on the closing price of Pfizer common stock of £21.29 ($32.18) on 20 November 2015.

Ian Read, chairman and chief executive officer, Pfizer, said: “The proposed combination of Pfizer and Allergan will create a global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world.

“Allergan’s businesses align with and enhance Pfizer’s businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth.

 “Through this combination, Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry.”

With the addition of Allergan, Pfizer will enhance its R&D capabilities in both new molecular entities and product line extensions.

The combination of Pfizer and Allergan will significantly increase the scale of Pfizer’s established business and their complementary capabilities will maximise the combined established portfolio according to Allergan.

In addition, Allergan brings topical formulation, manufacturing and its Anda distribution capabilities to the combined company.

Under the terms of the proposed transaction, the businesses of Pfizer and Allergan will be combined under Allergan plc, which will be renamed Pfizer plc.

As a result of the combination Pfizer said it now expects to make a decision about a potential separation of the combined company’s businesses by no later than the end of 2018.