Pfizer Inc, the maker of Viagra and Lipitor, has struck a deal to buy Botox-maker Allergan in a transaction valued at about $160 billion. As Joel Flynn reports the deal will create the world's biggest drug maker.
It's worth 160 billion dollars and the price isn't the only record-breaking aspect. Pfizer's bid for Allergan - if approved - will be the healthcare sector's biggest ever deal. And that's not all, says Brenda Kelly from London Capital Group. SOUNDBITE: London Capital Group Head Analyst, Brenda Kelly, saying (English): "I think ultimately it's going to be one of the biggest pharmaceutical companies in the world and it supercedes that of the Glencore moves that we've seen in the mining industry over the last number of months in terms of M&A action." Pfizer brands like Viagra will be now be sold alongside Allergan's plastic surgery staple Botox. The combined pharmaceutical colossus will have annual sales of more than 60 billion dollars. Well above number two U.S. drugmaker Merck & Co, which makes "just" 40 billion dollars a year in sales. But the biggest issue might be tax. Pfizer will redomicile to Ireland -- where Allergan is registered -- in a so-called "inversion" that will slash its corporate tax. SOUNDBITE: London Capital Group Head Analyst, Brenda Kelly, saying (English): "Having headquarters in Ireland does decrease their tax rate to 12 and a half percent, which is quite a decent deal, and there's an expectation as well that we'll see a split between the two companies, Pfizer and Allergan, one selling the high-end branded drugs, and one selling the generic ones, probably in the next couple of years." That won't go down well in Pfizer's current residence America - especially in an election year. But as companies look to consolidate ahead of a potential U.S. rate rise, 2015 could see even more high profile deals.