Pfizer, Allergan seal $160-bn deal

The merged entity is expected to generate annual operating cash flow in excess of $25 billion beginning in 2018

New York : In a historic merger that will create the world's biggest drugmaker, US pharma giant Pfizer has agreed to buy Botox-maker Allergan in a $160 billion deal.

Pfizer and Allergan announced that their "boards of directors have unanimously approved, and the companies have entered into, a definitive merger agreement under which Pfizer will combine with Allergan in a stock transaction... for a total enterprise value of approximately $160 billion," Pfizer said in a statement.

Under the terms of the proposed transaction, the businesses of Pfizer and Allergan will be combined under Allergan, which will be renamed 'Pfizer'. The companies expect that shares of the combined company will be listed on the New York Stock Exchange.

The combined company is expected to maintain Allergan's Irish legal domicile and Pfizer will have its global operational headquarters in New York and its principal executive offices in Ireland. Both companies have a good presence in India.

"The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world," Pfizer's Chairman and Chief Executive Officer Ian Read said.

"Allergan's businesses align with and enhance Pfizer's businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth.

The merged company's board is expected to have 15 directors, consisting of all of Pfizer's 11 current directors and four current directors of Allergan. The directors from Allergan will be its current Executive Chairman Paul Bisaro, Saunders and two other directors from the company, to be selected at a later date.

The combined company is expected to generate annual operating cash flow in excess of $25 billion beginning in 2018. The deal is expected to be completed in the second half of 2016 and is subject to receiving regulatory approval in the United States and European Union.

According to the merger agreement, Allergan parent company will be the parent company of the combined group. A wholly-owned subsidiary of Allergan will be merged with and into Pfizer, and subject to receipt of shareholder approval, the Allergan parent company will be renamed Pfizer.