Pfizer, Allergan In Third-Biggest Merger Ever
This article was originally published in Scrip
Pfizer and Allergan have announced their much-anticipated merger, agreeing a $160bn deal that will be the world's third biggest corporate deal ever, after AOL/Time Warner and Vodafone/Mannesmann. The deal is by far the biggest healthcare transaction in history; the previous largest was also completed by Pfizer (when it bought Warner-Lambert for $90bn 15 years ago).
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Allergan was expected to announce soon that it would follow its shareholders' advice and split the company in two, but it's being acquired by AbbVie for $63bn instead, finally giving investors a big boost in their Allergan holdings after years of decline.
Investors want to separate the CEO and chairman roles held by Brent Saunders, among other demands, but it's unclear whether new investor Carl Icahn – a prior Saunders supporter – will pursue the same causes.
Five companies in big pharma’s top 20 have come through mergers in the past 10 years or so that changed them significantly. As measured by standard financial performance parameters, the processes at Takeda and Teva (and to some extent, at Allergan) seem relatively smooth and productive. Those at Pfizer and Merck don’t. But it depends on how you look at the numbers.