Pharmaceutical giants Pfizer and Allergan confirmed Monday they will merge to form the world’s biggest drug company by sales, in a deal that is mostly, if not exclusively, about tax.
The third largest Pfizer and sixth largest Allergan will be the largest Pharmaceutical drug Company with 21.93 Lac Crore Market cap. This is the third largest merger after Vodafone and Aircel merge of 13 Lac Crore in 1999 and in 2000 between Times Warner & AOL of 12 Lac Crrore, And now in 2015 between Pfizer and Allergan 11 Lac Crore. The merge would be generate 21.93 Lac Crore Market cap that is equal to top 8 Indian Pharma Companies.
Novartis 16 Lac Crore
Pfizer 14.06 Lac Crore
Merck Pharma 10.89 Lac crore
Novo Nordisk 9.52 Lac Crore
Allergan 7.97 lac crore
The third largest Pfizer and sixth largest Allergan will be the largest Pharmaceutical drug Company with 21.93 Lac Crore Market cap. This is the third largest merger after Vodafone and Aircel merge of 13 Lac Crore in 1999 and in 2000 between Times Warner & AOL of 12 Lac Crrore, And now in 2015 between Pfizer and Allergan 11 Lac Crore. The merge would be generate 21.93 Lac Crore Market cap that is equal to top 8 Indian Pharma Companies.
The deal values the combined company at $160 billion (including debt), and, as expected, is structured in such a way as to reduce Pfizer’s tax bill by moving its domicile out of the U.S. to Ireland. The companies said they expect the company to have an effective tax rate of 17% to 18% in the first full year after closing, compared to around 25% for Pfizer at present.
The combined company will remain in all other aspects essentially an American one, with both its primary stock exchange listing and its corporate headquarters in New York City. Pfizer CEO Ian Read will lead the company, with Allergan CEO Brent Saunders assuming the titles of president and chief operating officer.
Unprecedented Deal
Pfizer, based in New York, makes medications including Viagra, pain drug Lyrica and the Prevnar pneumococcal vaccine, and Allergan produces Botox and the Alzheimer’s drug Namenda. Together, barring any divestitures, the companies will be the biggest pharmaceutical company by annual sales, with about $60 billion.
The deal will be unprecedented on many levels. It’s the largest acquisition so far this year. It’s the largest ever in the pharmaceutical world, eclipsing Pfizer’s purchase of Warner-Lambert Co. in 2000 for $116 billion. And if the new company is able to establish itself abroad for a lower tax rate, a controversial process called an inversion, it will be the largest such move in history.
Facilitate Split
An agreement may also facilitate the widely discussed potential for Pfizer to reconfigure itself by splitting the newly enlarged company into two: one focused on new drug development, the other on selling older medications. Pfizer said Monday it will decide on a potential separation by the end of 2018.
This Merge is five time larger then the Indian top 5 companies in terms of market Cap. Here are World's Top Five Companies:
Company Market cap
Johnson &Johnson 18.54 Lac crore Novartis 16 Lac Crore
Pfizer 14.06 Lac Crore
Merck Pharma 10.89 Lac crore
Novo Nordisk 9.52 Lac Crore
Allergan 7.97 lac crore
India's Top Five Companies:
Sun Pharma 1.72 Lac Crore
Lupin ltd 82, 836 crore
Dr. Ready 58, 016 crore
Cipla 51, 338 Crore
Aurobindo Pharma 49.473 Crore