Abbvie is buying Allergan in a $63 billion pharma mega-deal

  • AbbVie has agreed to buy Allergan in a $US63 billion cash-and-stock deal.
  • Allergan shareholders will receive 0.8660 AbbVie shares and $US120.30 in cash for each Allergan share that they hold, totaling $US188.24 per Allergan share.
  • The offer represents a 45% premium to the closing price of Allergan’s shares on Wednesday.
  • The US biopharmeuticals giant and the Irish drugmaker expect the deal to generate at least $US2 billion in annual pre-tax synergies and other cost savings within three years, and boost adjusted EPS by 10% in the year after the transaction closes.
  • Watch AbbVie and Allergan trade live on Markets Insider.

AbbVie has agreed to buy Allergan in a $US63 billion cash-and-stock deal that would combine two of the world’s largest pharmaceutical companies. News of the deal was first reported by the Wall Street Journal.

Allergan shareholders will receive 0.8660 AbbVie shares and $US120.30 in cash for each Allergan share they hold, totaling $US188.24 per Allergan share. The offer represents a 45% premium to the closing price of Allergan’s shares on Wednesday.

US biopharmaceuticals specialist AbbVie and Irish drugmaker Allergan expect the merger to create a leading player in immunology, neuroscience, women’s health, eye care, and other medical fields. They estimate the deal will generate at least $US2 billion in annual pre-tax synergies and other cost savings within three years, and lift adjusted EPS by 10% in the year after the transaction closes.

AbbVie expects Allergan to bolster the scale and profitability of its business, and diversify its revenue streams with its medical aesthetics division and other segments. It predicts the deal will enhance its ability to fund research and development, expand its global reach, and generate “robust cash flow” it can use to finance dividends, invest in new treatments, and pay off debt.

“With 2019 annual combined revenue of approximately $US48 billion, scale in more than 175 countries, an industry-leading R&D pipeline and robust cash flows, our combined company will have the opportunity to make even bigger contributions to global health than either can alone,” said Allergan CEO Brent Saunders.

News of the deal, which is slated to close in early 2020, sent shares in Allergan up 33% in pre-market trading, while AbbVie’s stock dropped 8%.

This story is still developing, check back for more updates…

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