Pharmaceutical giants Pfizer and Allergan close to $150billion merger that will create the world's largest pharmaceutical company
- Sources told the Wall Street Journal that the two giant companies are on the verge of merging
- The merger would make the new company the largest drug maker by sales
- Pfizer makes top sellers Viagra and Lipitor
- Allergan has a big hit with Botox
Pfizer Inc. and Allergan PLC are on the cusp of reaching a $150billion deal that would create the world's largest drug maker by sales, The Wall Street Journal reported on Sunday, citing unnamed people familiar with the matter.
According to the newspaper, terms of the deal include 11.3 Pfizer shares for every Allergan share, along with a small cash component.
The boards of each company were expected to approve the agreement Sunday and it could be announced Monday.
New York-based Pfizer (left) and Ireland-based Allergan (right) are reportedly merging into the world's largest pharmaceutical company by sales
Pfizer and Allergan representatives declined to comment.
If a deal is reached, it would be the biggest ever merger in health care and the largest 'inversion' ever - that's a tax-saving maneuver in which a U.S. company reincorporates in a country with a lower corporate tax rate.
Inversions have become a hot political topic, raising the ire of lawmakers in Washington and public interest groups.
Botox-maker Allergan is based in Ireland but runs much of its operations out of Parsippany, New Jersey.
Botox is a popular drug that temporarily wipes out wrinkles, but is also used to treat migraines.
To help secure that lower tax rate, the deal will be technically structured as a reverse merger, with Allergan buying New York-based Pfizer, according to the newspaper's report.
Viagra (left), made by Pfizer, is one of its bestsellers - Allergan has a top seller in Hollywood's favorite drug, Botox (right), which temporarily gets rid of wrinkles
Pfizer, the maker of Viagra (for erectile dysfunction) and Lipitor (for high cholesterol), has been dealing with tough competition from generics and pressure from investors to stimulate growth.
Generic competition is expected to cut Pfizer's sales by $28billion from 2010 through next year.
It's done three sizeable deals since 2000 to boost revenue.
Buying Allergan would add its brand-name medicines for eye conditions, infections and heart disease to Pfizer's extensive portfolio of vaccines and drugs for cancer, pain, erectile dysfunction and other conditions.
It would also allow Pfizer, the world's second-biggest drugmaker by revenue, to surpass Switzerland's Novartis AG and regain the industry's top spot.
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