Pfizer and Botox maker announced merger of $ 160 billion

American company Pfizer Inc. and Irish Allergan Plc announced a record merger in the pharmaceutical market. The cost of the deal, which is scheduled to be completed in the second half of 2016, will be $ 160 billion. According to its results, the world's largest pharmaceutical company, Pfizer Plc, will be created.

The cost of Allergan securities is estimated at about $ 363 per share, the statement said. Pfizer shareholders will receive one share of the new company for each share they already have, and Allergan shareholders will receive 11,3 shares.

Technically, the deal will be framed as a reverse merger, in which Allergan buys a larger Pfizer. That is, a record-breaking “corporate inversion” will be held, allowing Pfizer to change its tax jurisdiction from the US to the Irish and significantly reduce the tax burden.

Currently, the corporate tax rate paid by Pfizer in the United States is 25%. The company expects that the merger with the Irish Allergan and the transition under the tax jurisdiction of Ireland will reduce the tax rate in the first full year after completion of the transaction to 17-18%.

Chief Executive Officer and Chairman of the Board of Directors of Pfizer Ian Reed will hold similar positions in the combined corporation.

The merger of Pfizer and Allergan will create the largest pharmaceutical company with cumulative sales of more than $ 60 billion per year. The merger should provide an additional 10% profit in the 2019 year.

The market value of Allergan, the best known drug of which is Botox anti-wrinkle agent («Botox), at the end of last week exceeded $ 120 billion. Pfizer is estimated at almost $ 200 billion. Thus, the capitalization of the combined company may exceed $ 300 billion.

The previous record of transactions in the pharmaceutical industry was also set by Pfizer. In 2000, the company acquired another US company, Warner-Lambert Co. for $ 116 billion

As the Forum reported earlier, in 2013, Pfizer wanted to to acquire a Swedish-British company AstraZeneca, but the Europeans denied the Americans three times. Pfizer Last Offer exceeded $ 117 billion.