Published on : Nov 24, 2015
The looming deal by Pfizer Inc, which is also by far touted as one of the most ambitious deals in the healthcare industry to buy Allergan Plc for over US$150 bn will seal a milestone for mergers and acquisitions in the industry. As the deal is finalized, the total value of M&A till 2015 will reach US$600 bn.
Forced to remain satisfied with cheap finance until recently, the healthcare industry witnessed a wave of M&A activities since the beginning of 2014, ranging from large drug makers taking over smaller concerns to consolidation between generic drug makers and collaborations between insurers.
Pfizer's takeover of Allergan is largely identified as a tax-driven endeavor. People who are either aware of the matter or is related to the same in some possible way that the company won the board’s approval on Sunday. The deal according to them will catapult the healthcare sector at the forefront of deal-making industries, ahead of both technology and energy.
Data released by leading research agencies show that M&S in the healthcare sector till the end of the last week has already reached over US$460 bn, as opposed to energy and power, which stood at just over $572 bn and the high technology sector, whose overall M&A valuation stood over US$514 bn.
The impending Pfizer-Allergan deal will therefore, be the largest deal in the history of the global healthcare sector, surpassing the record deal in 1999 when Pfizer agreed to shed a whopping US$90 bn to get the reigns of Warner-Lambert and with this the former gained control of the cholesterol fighter Lipitor.
The deal expected to give executives from other large U.S.-based drug makers a pause to think over since with the deal Pfizer will gain a major tax advantage. However, this did not forbid the bankers and industry-officials from questioning whether others will race to follow the suit.