AbbVie to Acquire Allergan in $63 Billion Deal

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NORTH CHICAGO, Ill. and DUBLIN—AbbVie Inc. (NYSE: ABBV) and Allergan plc (NYSE: AGN) have entered into a definitive transaction agreement under which AbbVie will acquire Allergan in a cash and stock transaction for a transaction equity value of approximately $63 billion, based on the closing price of AbbVie's common stock of $78.45 on June 24, 2019. The deal, which was announced by the two companies this morning, is worth about $80 billion including debt, according to The Wall St. Journal.

“This is a transformational transaction for both companies and achieves unique and complementary strategic objectives,” said Richard A. Gonzalez, chairman and chief executive officer, AbbVie. “The combination of AbbVie and Allergan increases our ability to continue to deliver on our mission to patients and shareholders. With our enhanced growth platform to fuel industry-leading growth, 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.”

Brent Saunders, chairman and chief executive officer, Allergan, remarked, “This acquisition creates compelling value for Allergan's stakeholders, including our customers, patients and shareholders. With 2019 annual combined revenue of approximately $48 billion, scale in more than 175 countries, an industry-leading R&D pipeline and robust cash flows, our combined company will have the opportunity to make even bigger contributions to global health than either can alone. Our fast-growing therapeutic areas, including our world class medical aesthetics, eyecare, CNS and gastrointestinal businesses, will enhance AbbVie's strong growth platform and create substantial value for shareholders of both companies.”

The combined company will consist of franchises with leadership positions across immunology, hematologic oncology, medical aesthetics, neuroscience, women's health, eyecare and virology. AbbVie, which split from Abbott Laboratories in 2013, produces the best-selling drug Humira, which is used to treat rheumatoid arthritis and chronic plaque psoriasis. Humira will lose its exclusivity in 2023. Allergan's product portfolio, including Botox and the dry eye drug Restasis, will be enhanced by AbbVie's commercial strength, expertise and international infrastructure, the companies said in a statement.

AbbVie's enhanced growth platform, comprised of growing and durable franchises across highly-attractive therapeutic areas, is expected to grow at a high-single digit annual growth rate well into the next decade, from more than $30 billion in 2020, the companies said. The combined companies generated $19 billion in operating cash flow in 2018.

Upon completion of the transaction, AbbVie will continue to be incorporated in Delaware as AbbVie Inc. and have its principal executive offices in North Chicago, Ill. AbbVie will continue to be led by Richard A. Gonzalez as chairman and chief executive officer. Two members of Allergan's board, including chairman and chief executive officer, Brent Saunders, will join AbbVie's board upon completion of the transaction.

Under the terms of the transaction agreement, Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share that they hold, for a total consideration of $188.24 per Allergan share. The transaction represents a 45 percent premium to the closing price of Allergan's shares on June 24, 2019.

It is expected that, immediately after the closing of the acquisition, AbbVie shareholders will own approximately 83 percent of AbbVie on a fully diluted basis and the Allergan shareholders will own approximately 17 percent of AbbVie on a fully diluted basis.

The transaction is subject to certain regulatory approvals and approval by Allergan's shareholders.