Pfizer, Allergan Terminate $160 Billion "Inversion" Merger; Banks Lose Over $100MM In Fees

Discussion in 'Finance Related News' started by admin, Apr 6, 2016.

  1. admin

    admin Administrator Staff Member

    Feb 2014
    Likes Received:
    Less than two days after the US Treasury cracked down on inversion deals, and one deal in particular, Pfizer's pharma record $160 billion acqisition of Allergan, moments ago the two companies announced the deal is officially over.
    From the press release:

    Pfizer Announces Termination of Proposed Combination with Allergan

    Pfizer Inc. today announced that the merger agreement between Pfizer and Allergan plc has been terminated by mutual agreement of the companies. The decision was driven by the actions announced by the U.S. Department of Treasury on April 4, 2016, which the companies concluded qualified as an “Adverse Tax Law Change” under the merger agreement.

    “Pfizer approached this transaction from a position of strength and viewed the potential combination as an accelerator of existing strategies,” stated Ian Read, Chairman and Chief Executive Officer, Pfizer. “We remain focused on continuing to enhance the value of our innovative and established businesses. Our most recent product launches, including Prevnar 13 in Adults, Ibrance, Eliquis and Xeljanz, have been well-received in the market, and we believe our late stage pipeline has several attractive commercial opportunities with high potential across several therapeutic areas. We also maintain the financial strength and flexibility to pursue attractive business development and other shareholder friendly capital allocation opportunities.”

    “We plan to make a decision about whether to pursue a potential separation of our innovative and established businesses by no later than the end of 2016, consistent with our original timeframe for the decision prior to the announcement of the potential Allergan transaction,” continued Read. “As always, we remain committed to enhancing shareholder value.”

    In connection with the termination of the merger agreement, Pfizer has agreed to pay Allergan $150 million for reimbursement of expenses associated with the transaction.
    The biggest losers here, aside from senior AGN management who stood to cash out of their newly vested, debt-propped up shares, are the advising investment banks among which are Goldman, Guggenheim, Centerview, Moelis & Company (advising Pfizer), who were supposed to split $100 million among each other as part of the deal. JPMorgan and Morgan Stanley were advising Allergan and they two will miss out on dozens of millions in ibanking revenue.






Share This Page