Irish firm snapped up by Chicago-based AbbVie in one of biggest ever pharmaceutical deals

This article is more than 1 year old

This article is more than 1 year old

The US drug company AbbVie is to buy Allergan, the Irish-based maker of Botox, for $63bn (£49bn), in one of the biggest deals in the global pharmaceutical industry.

Chicago-based AbbVie, which makes the world’s best-selling prescription drug Humira, for rheumatoid arthritis and other inflammatory diseases, said it would pay $120.30 in cash and a portion of AbbVie stock for each Allergan share. This amounts to $188.24 per share.

The deal will create a company with revenues of $48bn. Dublin-based Allergan specialises in medical aesthetics and eye care, both fast-growing areas, as well as stomach drugs and treatments for the central nervous system. Its treatments include frown-line smoothing, eyelash lengthening and double-chin removal.

AbbVie said the purchase would give it a more diversified product portfolio. Its bestseller Humira will lose patent protection in 2023, which means other drugmakers can make cheaper generic versions.

AbbVie shareholders will own 83% of the enlarged company, while Allergan shareholders will own 17%. It will have its headquarters in Chicago and will be led by the AbbVie boss, Richard Gonzalez, as chairman and chief executive.

Two members of Allergan’s board, including its chief executive, Brent Saunders, will join the board when the deal is completed, expected early next year. Allergan shareholders and regulators have yet to approve the deal.

AbbVie expects to reap at least $2bn in annual cost savings in the third year after the acquisition, but vowed to leave investments in key growth areas untouched. It wants to pay down its debts by $15bn to $18bn by the end of 2021.

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AbbVie was spun off by US firm Abbott Laboratories in 2013 and ditched a $54bn attempt to buy Shire a year later after the Obama administration introduced rules to clamp down on overseas acquisitions driven by tax avoidance.

Shire, which was founded in Basingstoke, southern England, and makes ADHD drugs, was acquired by Japan’s biggest pharmaceutical company Takeda for £46bn last year.

Earlier this year, Bristol-Myers Squibb agreed to pay $74bn for Celgene, but the deal has been delayed after US federal regulators voiced concerns over the merger of the two American cancer drug firms.