Allergan spikes 30% after AbbVie agrees to buy the Botox-maker for $63 billion

  • Shares of Allergan surged more than 30% in early trading on Tuesday after AbbVie agreed to acquire the drugmaker for $US63 billion.
  • AbbVie’s bid of $US188 a share in cash and stock represents a 45% premium from Allergan’s closing price on Monday.
  • The acquisition will give AbbVie access to Allergan’s portfolio of profitable beauty drugs, including Botox.
  • Watch Allergan trade live.

Botox-maker Allergan jumped as much as 30% before the opening bell on Tuesday after rival AbbVie reached a deal to acquire the drugmaker for $US63 billion.

According to a statement from AbbVie, the offer is worth about $US188 a share in cash and stock, which represents a 45% premium from Allergan’s closing price on Monday. AbbVie was down as much as 9% in pre-market trading.

“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,” Brent Saunders, Allergan’s chairman and CEO, said in a statement.

Allergan has an attractive portfolio of beauty drugs, including Botox, which now belong to AbbVie. The combined company will have product lines spanning immunology, hematologic oncology, neurosciences, women’s health, eye care, and virology.

AbbVie expects the acquisition to generate at least $US2 billion in pre-tax synergies and cost reductions by year three, per the company’s statement. The deal is expected to close in early 2020.

Allergan shareholders will own about 17% of AbbVie, while AbbVie shareholders will retain 83%.

Allergan was down 3% year-to-date through Monday’s close.

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