US drug company AbbVie is to buy Allergan, the Irish maker of Botox, for US $63bn, in one of the biggest deals in the pharmaceutical industry.
AbbVie, which makes Humira, the world’s best-selling prescription drug for rheumatoid arthritis and other inflammatory diseases, will 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 projected revenues of $48bn. Based in Dublin, Allergan specialises in medical aesthetics and eye care as well as treatments for the central nervous system. Its treatments include frown-line smoothing, eyelash lengthening and double-chin removal.
AbbVie chief executive Richard Gonzalez said the company was able to buy Allergan because of the massive amount of cash that Humira generates. The purchase will give AbbVie a more diversified product portfolio at a crucial time. Humira will lose patent protection in 2023, which means other drug makers 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 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 early next year.