Two giants of the health care industry, Pfizer and Allergan, announced Monday that they will merge to create the world's largest drug maker in terms of sales. Pfizer will buy Allergan, the maker of products like Botox, for $160 billion.
The deal could allow New York-based Pfizer to move its headquarters to Dublin, where Allergan is based, and avoid high U.S. corporate tax rates. As noted in the companies' shared release, the "combined company is expected to maintain Allergan's Irish legal domicile."
"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," said Ian Read, chairman and CEO of Pfizer, in the release.
The deal is expected to close in the second half of 2016, and it requires regulatory approvals. Allergan will also be divesting its interest in the generics business Teva Pharmaceuticals.
"Through this combination, Pfizer will have greater financial flexibility," said Read. "That will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the United States, while also enabling our pursuit of business development opportunities on a more competitive footing within our industry."
Brent Saunders, CEO of Allergan, noted in the release that "the combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction" that will allow Allergan "to operate with greater resources at a much bigger scale."
The combined companies' will produce major drug brands like Viagra, Celebrex, Botox and Juvéderm and generate roughly $63 billion in combined sales.
It is unclear how this deal will impact the companies' agency relations. Further information was not available; a rep for the two companies did not immediately respond to requests for comment.