Nov 23, 2015 06:00 AM EST

Pfizer's $150 Billion Merger With Allergan Imminent


Pfizer is set to seal the $150 billion merger deal with Allergan.

A union between Pfizer and Allergan would mark the biggest corporate merger for 2015 with the former reaching a market cap of $199 billion while the latter was at $123 billion during Friday's close.

Approval and completion of the deal between the two companies' boards of directors would top a remarkable solidification wave upsetting the United States healthcare industry and establish the world's largest drug maker by trade.

A merger between Prizer and Allergan, the maker of Botox, would also likely ignite concerns of critics that consumers would shell out more money for drugs as competition among insurers, retailers and manufacturers take a downturn. In addition, the two companies would be in the center of a presidential election argument over the endeavors made by U.S. companies to acquire lower tax scales by making use of mergers to shift their headquarters out of the country.

According to Los Angeles Times, government forces, various market and most especially, the Affordable Care Act, have complicated the revenues and profits progress outlook of the different healthcare companies who have joined forces in order to reposition themselves.

An example would be the merger of two of the country's topmost drug store chains, Rite Aid and Walgreens, who announced in October a $9.4 billion merger. Last July, Anthem bought rival Cigna for $54 billion to create the ultimate health insurance company in the United States.

Newsweek has learned chief executives of Pfizer Inc. and Allergan Inc. have decided on the positions they would assume as the firms merge, sources said.

Ian Read, Pfizer's CEO, will take the reins and retain his role for the combined company while Brent Saunders, Allergan's CEO, will tackle another top seat dealing with the integration and operations.

Insiders privy to the matter refused to be identified as negotiations between Pfizer and Allergan merger are confidential. Both companies have declined to give out any statement.

The New York-based Pfizer would soon change their headquarters' location to Ireland, where Allergan is registered when the $150 billion deal gets signed and enacted. Read's longtime ambition of an inversion deal would be realized as Pfizer would get out from the U.S. corporate tax rate of 35 percent compared to that of Ireland's 12. 5 percent.

Furthermore, the Pfizer-Allergan merger would spawn annual sales greater than $60 billion, placing them well ahead of the top 2 U.S. drugmaker Merck & Co, which has about $40 billion annual sales.

Pfizer drugs including Viagra, Lipitor and nerve pain treatment Lyrica would be combined with Allergan's Restasis dry eye medication and Namenda memory loss treatment.

As Pfizer inks the deal with Allergan, many industry investors and analysts believe that the merger is a prelude to the two companies splitting in 2017 with one trading inexpensive generics and one selling high-margin branded drugs, as per Reuters.

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