Business Irish

Monday 15 July 2019

AbbVie to buy Irish-headquartered Botox-maker in $63bn deal

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Manas Mishra and Ankur Banerjee

Drugmaker AbbVie said on Tuesday it would buy Irish-headquartered Botox-maker Allergan for about $63bn (€55bn), grabbing control of by far the biggest name in medical aesthetics to help reduce its reliance on blockbuster arthritis treatment Humira.

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

Allergan chief executive Brent Saunders put together the current version of the company through a series of deals to roll up several pharmaceutical firms in 2014, and has run the company since then.

He built his reputation as a dealmaker, but his company has struggled since Pfizer walked away from a $160bn deal to buy Allergan in 2016.

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

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

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.

AbbVie shares were trading down 10.5pc at $70.50, while Allergan shares were up nearly 28.4pc in early trading.

Maxim Jacobs, director of research for North America at Edison Investment Research, said the deal provides AbbVie with a set of assets to help diversify away from Humira at a very reasonable price.

"In return, Allergan shareholders get a decent premium to what has been an outrageously low stock price," Jacobs said.

AbbVie will continue to be incorporated in Delaware as AbbVie and will be led by Richard Gonzalez as chairman and chief executive officer.

Saunders and another member of Ireland-based Allergan's board will join AbbVie's board upon completion of the transaction.

The deal is expected to add 10pc to adjusted earnings per share over the first full year following the close, the companies said.

Reuters

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