Pfizer Inc Had Early Talks with Allergan Plc to Discuss Takeover Deal
Pfizer Inc, an American multinational pharmaceutical corporation, has recently held talks with Allegran Plc to discuss takeover deal, which could be the biggest acquisition of this year, the Wall Street Journal and Financial Times reported.
The healthcare sector has seen several big and small deals since the beginning of the 2014, including large drugmakers buying smaller rivals.
Pfizer’s takeover of Allergan, which has a market value of $113 billion, will be its second recent attempt to acquire it big rival after its last year’s unsuccessful courtship of Anglo-Swedish pharmaceuticals group AstraZeneca Plc.
Allergan and Pfizer jointly will become a company worth $219 billion. The takeover will create the world’s largest healthcare group with a market value of around $330 billion, ahead of Johnson & Johnson on $278 billion.
Pfizer spokesman and Allergan declined to give any comment. About earlier deal with AstraZeneca, Pfizer’s CEO Ian Read said the key reason for entering into a deal with the company is that switching its headquarters from the United States to the United Kingdom will help it to lower its tax bill.
Now, it is thought that takeover of Allergan could offer similar advantages to Pfizer. “When you're the size of Pfizer, an acquisition like this may be the only choice you have in order to be able to move the needle for sequential growth...so the question now becomes, if not this, what, and if not now, when?” said WBB Securities’ analyst Stephen Brozak.
As per analysts, Allergan would give Pfizer, whose revenues are expected to slide 3.3% this year, a boost in top-line growth. The revenue of Allergan is seen increasing 39% this year, according to Thomson Reuters I/B/E/S estimates.
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