Allergan will be acquired by AbbVie for approximately $63 billion in cash and stock, the two companies announced in a press release.
Under a definitive transaction agreement, which has been signed by both entities, Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each Allergan share they hold.
"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," Brent Saunders, Allergan chairman and CEO, said.
Allergan shares jumped 29% with AbbVie shares dropping more than 8% with the announcement of the acquisition, according to the Wall Street Journal.
AbbVie chairman and CEO Richard A. Gonzalez said in a webcast presentation, “We’ll also have a durable eye care franchise with approximately $2 billion in revenue and leadership in glaucoma and dry eye, as well as multiple mid and late stage pipeline prospects.”
Two members of Allergan’s board, including Saunders, will join AbbVie’s board in the transaction. Gonzalez will remain chairman and CEO. AbbVie will continue to be incorporated in Delaware and keep its executive offices in North Chicago, the release said.
“The addition of Allergan’s attractive franchises to AbbVie’s existing growth platform immediately creates a very large and compelling growth engine with stand-alone scale. With revenue of more than $30 billion in 2020, we expect our growth platform to drive high single-digit annual growth over the next decade,” Gonzalez said.
The deal will allow Allergan’s product line to benefit from AbbVie’s commercial strength and international infrastructure while providing pre-tax synergies and other cost reductions totaling at least $2 billion in year three, the companies announced.
Editor’s note: This article has been updated to include remarks made by AbbVie Chairman and CEO Richard A. Gonzalez in a webcast presentation.