The latest in a blockbuster year of mergers and acquisitions, the purchase of Irish Botox manufacturer Allergan by Chicago pharma giant Abbvie is set to be the second largest healthcare transaction of 2019 so far.
The deal will see Abbvie pay a mixture of cash and stock for each Allergan share, for a total of US$188.24 per share.
The consideration is valued at $63bn, with Abbvie taking on an additional $20bn of Allergan’s debt, for a total deal value of $83bn, the Financial Times reports.
The price represents a 45% to Allergan’s closing price the previous day, and Abbvie’s share price dropped by 7.5% in response.
Abbvie is best known for its drug, Humira, which is the world’s best-selling treatment for inflammatory diseases and resulted in more than $20bn of revenue for Abbvie in 2018. However, the drug’s patent is set to expire in 2023 in the US and is already competing against generic versions in Europe, according to a Reuters report.
Allergan has reportedly been struggling since a $160bn merger with Pfizer fell through in 2016. The company, which manufactures Botox - the popular, non-surgical cosmetic treatment - will help to diversify Abbvie’s portfolio going forward.
"This is a transformational transaction for both companies and achieves unique and complementary strategic objectives," said Richard A. Gonzalez, chairman and chief executive officer, AbbVie.
"The combination of AbbVie and Allergan increases our ability to continue to deliver on our mission to patients and shareholders. With our enhanced growth platform to fuel industry-leading growth, this strategy allows us to diversify AbbVie's business while sustaining our focus on innovative science and the advancement of our industry-leading pipeline well into the future."