Pfizer and Allergan is in talk for a merger

The US biggest drug maker, Pfizer Inc., announces that the company is currently in talks for a merger with Ireland-based botox maker, Allergan Plc.

If both companies reached an agreement, the merger could be the biggest merger in the pharmaceutical industry.

According to the Wall Street Journal, there are still few problem that needs to be overcome before both companies continue with the deal. Among them is the falling shares price of its rival shares companies which could lead to lower company value before the merger takes place.

The issue is even raised by chief executive of Pfizer, Ian Red, who said that "I'm not sure there has been a readjustment in what the investors and leaders of those companies believe those companies are worth in a transactional situation."

Pfizer's latest market capitalization is worth $218.6 billion, while Allergan market capitalization is $105 billion lower according to data by USA Today.

Pfizer shares is traded at $35.45 per shares on Wednesday while Allergen's shares is at $287.20 per share, slightly lower than its highest 52-week value which is about $236 per share.

Workforce issue also needs to be settled as Pfizer is currently planning to reduce its labor to keep the operational cost low.

However, Allergan's management might be considering other strategy for that. Even the fate of Allergen's CEO Brent Saunders also has not been decided by Pfizer, if the merger becomes successful.

Although the deal seems to be good for the company's prospect, however, lots of scepticism is in the air as analysts and politician are calling the merge as a way to avoid paying high tax.

According to Reuters, Hilary Clinton is among the most vocal regarding the merger as it will mean a loss to the country.

Her spokesperson, Ian Sams said that "Clinton is committed to cracking down on so-called 'inversions,' where a company chooses to leave the U.S. on paper to game the tax system, and believes we should reform our tax code to encourage investment in the U.S., rather than shipping earnings and jobs overseas." 

In terms of benefit, Pfizer which is currently among the company with the biggest collection of patent-protected medicines is expected to expand its list.

Among the product that will be added includes Botox and Restasis from Allergan. Previously, Pfizer acquired Hospira Inc. in a deal worth $16 billion that increase its off-patent drug sale.