Pfizer has agreed a deal to take over Allergan for $160 billion (£105 billion), in the biggest pharmaceuticals deal the world has ever seen.
It will allow Pfizer to move its headquarters to Dublin, where Allergan is domiciled, and pay Ireland's 12.5 per cent corporation tax instead of the US tax of 35 per cent.
The takeover has been on the cards for quite some time, but was reportedly held up by US Treasury's announcement on the tightening of the rules for tax inversions.
Pfizer, which is headquartered in New York, is one of the world's largest pharmaceutical companies. It develops and produces vaccines and other medicine including Lipitor, which lowers blood cholesterol, and Viagra, for erectile disfunction. Allergan is domiciled in Dublin and produces Botox, the Alzheimer's drug Namenda and dry-eye medication Restasis.
Pfizer's potential acquisition of Allergan would allow Pfizer to redomicile to Ireland, where it could potentially take advantage of lower tax rates. But new US rules on this kind of "tax inversion" are uncertain and have delayed the deal so far.
The deal Allergan's shares at $363.63 each, compared with the stock's close of $312.46 on November 20. The merged company will be called Allergan Plc as it moves its tax base to Ireland, but it will then change its name to Pfizer Plc.
Additional reporting by Reuters
