Pharmaceuticals firm AbbVie buys Botox-maker Allergan for £49.5bn

25 June 2019, 15:20 | Updated: 25 June 2019, 16:21

US drugmaker AbbVie is aiming to diversify its portfolio through a $63bn (£49.5bn) deal for Botox creator Allergan.

The agreement - subject to regulatory and shareholder approval - will see AbbVie own 83% of the new company.

The maker of the global blockbuster immune disorder treatment Humira - the world's most popular drug - will pay $120.30 (£94.54) in cash and a portion of AbbVie stock for each share in Ireland-based Allergan.

It amounted, AbbVie said, to $188.24 (£147.93) per share, or a 45% premium to Allergan's closing price on Monday.

The tie-up was seen as important to both given that each company currently relies on a small core of key products.

In AbbVie's case, Humira brought in $20bn (£15.7bn) last year but it is facing the introduction of generics, a so-called patent cliff, in its core US market.

Allergan's shares have been trading at around half the value seen in 2016 when a proposed tie-up with Pfizer collapsed.

Shares of Allergan surged more than 30% on news of the latest takeover while AbbVie's stock was 8% lower at the open in New York.

AbbVie chief executive and chairman Richard Gonzalez, who will head the combined company, said: "This is a transformational transaction for both companies and achieves unique and complementary strategic objectives.

"The combination of AbbVie and Allergan increases our ability to continue to deliver on our mission to patients and shareholders."

Maxim Jacobs, director of research for North America at Edison Investment Research, told the Reuters news agency 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," he said.