Pfizer to take over Allergan in blockbuster merger deal of $160 billion

US drugs giant Pfizer Inc. has signed a dea

l to buy Ireland based Allergan for $ 160 bn making it the biggest pharmaceuticals merger deal in healthcare sector.

• The merger would create the world’s biggest drugmaker Pfizer Plc with itsheadquarters in Dublin, Ireland.
• Under this deal, Allergan shareholders will receive 3 shares in the merged company for each of their Allergan shares.

Currently Pfizer Inc is selling flagship pharmaceutical products like Viagra and cholesterol drug Lipitor, while Allergan is best known for selling anti-wrinkle treatment drug Botox, Alzheimer’s drug Namenda and dry-eye medication Restasis.

As per Analysts this deal will allow Pfizer. Inc to escape relatively high US corporate tax rates (nearly 35%) by moving its headquarters to Dublin where corporate tax is as low as 12.5 %.

• It should be noted that such kind of merger deals to evade the high corporate tax is termed as corporate inversion deals.