Pfizer announces historic plan to purchase Allergan

Pharmaceutical company Pfizer announced Monday it is buying Ireland-based Allergan for approximately $160 billion in what would be the largest deal in the history of the healthcare sector.

Once the deal is final—it is expected to close in the second half of 2016—the companies will be combined as Allergan PLC, and then changed to Pfizer PLC. Current Allergan shareholders will receive 11.3 shares of the new company for each of their Allergan shares. Current Pfizer shareholders will receive one share of the new company for each of their Pfizer shares.

“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,” Ian Read, Pfizer chairman and CEO, said in a statement. “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 deal immediately began to pick up criticism, because it would allow New York-based Pfizer to relocate to Ireland and pay a much lower tax rate.

For example, Bernie Sanders, U.S. Senator and current Democratic presidential candidate, issued the following statement on his website: “The Pfizer-Allergan merger would be a disaster for American consumers who already pay the highest prices in the world for prescription drugs. It also would allow another major American corporation to hide its profits overseas. The Obama administration has the authority to stop this merger, and it should exercise that authority. Congress also must pass real tax reform that demands that profitable corporations pay their fair share of taxes.”

The New York Post covered investor reactions to the news, describing them as being “of mixed opinion.”