Pfizer Said Near Agreement to Buy Allergan in Biggerst Deal

Pfizer Inc. is in advanced talks to buy Botox maker Allergan Plc for as much as $380 per share, according to people familiar with the matter.

The companies are aiming to announce a deal as soon as Monday, the people said, asking not to be identified because the discussions are private. The price being discussed is $370 to $380 per share, two of the people said. However, the U.S. Treasury Department’s letter on tax inversion deals, released on Wednesday, could delay the final agreement and change the terms of any transaction, another person said.

Representatives for Allergan and Pfizer declined to comment.

A deal at $380 per share would value the company at almost $150 billion and be the biggest health-care deal ever, as well as the largest acquisition this year. Allergan dropped in late trading after the Treasury’s letter, which said it is reviewing ways to address overseas acquisitions and plans to issue guidance later this week.

The transaction would strengthen Pfizer’s brand-name drug business and could pave the way for an eventual split in two. It will also allow the U.S. drugmaker to transfer its headquarters to Ireland to take advantage of lower business tax rates in the country -- a transaction known as an inversion.

Allergan CEO

The companies were moving toward a plan to make Allergan’s Brent Saunders chief executive officer of the combined firm, people with knowledge of the matter said on Nov. 11.

The purchase would also keep Pfizer on track if it decides to go forward with a split into two companies, an option that Chief Executive Officer Ian Read has raised as a possibility. One business would focus on older, soon-to-be-generic drugs, while the other would develop and market new brand-name products.

Allergan’s portfolio, which includes top-selling brands like the anti-wrinkle injection Botox and the Alzheimer’s drug Namenda, would help beef up Pfizer’s brand-name drug business before splitting it off.

To date, the largest deal in the drug industry was Pfizer’s $116 billion purchase of Warner-Lambert Co. in 2000, data compiled by Bloomberg show.

Allergan has more than 70 projects in mid- to late-stage development, according to a conference call on Nov. 4. It has acquired a number of companies as it expands its branded-drugs business after agreeing to sell its generics arm to Israeli rival Teva Pharmaceuticals Industries Ltd. for about $40.5 billion. The company has topped earnings estimates for the past eight quarters, positioning it as an attractive addition to Pfizer’s portfolio.

Pfizer has been looking for its next big hit after patents expired for its cholesterol drug Lipitor and arthritis drug Celebrex. The company, which reported $49.6 billion in revenue last year, raised its profit forecast for 2015 in September.

#Pfizer #Economy #Allergan #Health #NorthAmerica