Bigger Pharma: Allergan in merger talks with Pfizer

NEW YORK: Botox- maker Allergan said it was in ‘ friendly’ merger talks with Pfizer that have the potential of forming a US$ 300 billion pharmaceutical behemoth.

Based on its market value, Allergan’s price could run US$113 billion or more, making the deal, if it happens, the largest takeover in what is already a record year of merger and acquisition activity on Wall Street.

Ireland- based Allergan said in a statement that it had been approached by US-based Pfizer and that it “is in preliminary friendly discussions regarding a potential business combination transaction.”

In an interview with the Wall Street Journal, Pf izer chief executive Ian Read confirmed the talks and said that a key motivation was to move the US company’s tax domicile offshore to take advantage of Ireland’s much lower corporate tax regime, in what it called a corporate tax inversion.

“We’re in a tremendous disadvantage right now,” he said. “Our tax code is hugely disadvantageous to American h igh tech mult i nat ional companies.”

A deal would combine Allergan, with nearly US$ 20 billion in annual sales, with Pfizer, which is valued at US$218 billion and has nearly US$ 50 billion in sales.

The news sent Allergan shares up 6.0 percent to US$ 304.38, while Pfizer shares lost 1.9 percent to US$ 34.77.

Allergan is best known for its rejuvenating Botox drug, while Pfizer’s top- line treatments include the anti- cholesterol treatment Lipitor and Viagra, used to help with erectile dysfunction.

If Pfizer relocates its statutory headquarters to Allergan’s base in Dublin, the deal could bring huge tax savings. — AFP