Monday 21 October 2019

AbbVie to buy Allergan in $63bn deal

Done deal: Allergan and AbbVie currently employ more than 2,700 staff in Ireland between them
Done deal: Allergan and AbbVie currently employ more than 2,700 staff in Ireland between them
Ellie Donnelly

Ellie Donnelly

Drug company AbbVie is to buy Botox-maker Allergan for around $63bn (€55bn), grabbing control of by far the biggest name in medical aesthetics to help reduce its reliance on blockbuster arthritis treatment Humira.

Allergan employs more that 2,000 people across Ireland, and earlier this year announced a €65m investment at its manufacturing campuses in Westport and Dublin.

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To date the group has invested €675m here.

AbbVie has 700 staff here, in five locations - three manufacturing facilities in Sligo and Cork, and two offices in Dublin.

Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each share held, for a total consideration of $188.24 per Allergan share, a premium of 45pc to the stock's Monday close.

Including debt, the deal values Allergan at $83bn (€73bn).

AbbVie shares were down 14.4pc at $67.10, while Allergan shares were up 27pc at $164.96 in early trading.

AbbVie has been under pressure to diversify its portfolio as Humira, the world's best-selling drug, is already in competition with cheaper versions in Europe.

It faces expiration of its patents in 2023 in the United States, its most important market.

Humira, which brought in revenue of about $20bn last year, reported the first fall in quarterly sales in years in the January-March period.

AbbVie CEO Richard Gonzalez, 65, will helm the combined business and remain chairman and chief executive through 2023, the companies said.

Meanwhile, Allergan CEO Brent Saunders, who put together the current version of his company through a series of deals to roll up several pharmaceutical firms in 2014, will join AbbVie's board upon completion of the deal.

Mr Saunders built his reputation as a dealmaker, but Allergan has struggled since Pfizer walked away from a $160bn (€140.5bn) deal in 2016.

Allergan's shares have lost around half their value since then.

He has been under pressure over the last year to break up or sell the company, with activist investor David Tepper running a campaign to urge Allergan to hire an independent chairman.

Shares of AbbVie have also languished, losing more than a third of their value from highs hit in January 2018 over concerns about competition to Humira.

Mr Gonzalez said: "This is a transformational transaction for both companies and achieves unique and complementary strategic objectives."

"This strategy allows us to diversify AbbVie's business while sustaining our focus on innovative science and the advancement of our industry-leading pipeline well into the future," he added.

The deal was a better-than-expected outcome for Allergan as investors and analysts were expecting a split, Cantor Fitzgerald analyst Louise Chen wrote in a note, adding that it is unlikely that anyone else will step in and bid for Allergan at this point.

Additional reporting Reuters

Irish Independent

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