The biggest pharma deal ever nears completion; Pfizer and Allergan close to seal merger

The biggest pharmaceutical company in the US is currently nearing a deal for the biggest merger in the history of the pharmaceutical industry.

The merger will see the makers of Viagra and Botox become the biggest pharmaceutical company and at the same time receive the benefit of lower tax payment.

According to Bloomberg, a source familiar with the issue said that both parties are expected to reach a deal as soon as this Monday.

Through this deal, Pfizer is expected to give 11.3 shares for each Allergen's share so that it will seem like the Allergen is buying the much larger Pfizer instead of the other way around.

Pfizer will be able to benefit from paying low taxes by locating the company's main address to a much lower cost country.

Besides tax benefit, investors will also benefits as they will receive a premium of up to 27 percent above Allergan's stock price. Besides that, shareholders will also receive some cash when an agreement is reached.

Newsday reported that the total deal will be worth around $150 billion and could see Pfizer stocking up more products in its inventory. Voting for the merger will be done on Sunday by the board of directors for both companies and announcement will be made the next day whether the deal is approved or not.

However, The New York Times said that there might be a delay in the deal if the board of directors disagree on some key matters.

It is expected that the chief executive officer of Pfizer, Ian Red  will be appointed CEO of the combined company while the Allergan's CEO, Brent Saunders will be the top lieutenant.

Previously, the company is under pressure with the US Treasury which is currently hunting down on companies that are benefiting from the tax inversion rules.

According to the Treasury, they are expected to vote for new regulation soon to avoid more companies from using the loophole in the system leaving less profit to the US government.

Besides merging with Allergan, Pfizer has been actively buying its competitor in order to get the copyright for some of its valuable drug.

Among companies bought by Pfizer is Hospira Inc for $17 billion. Hospira is currently among the biggest generic drug maker that is often bought by hospitals around the US.

Currently, the representative from both companies is unavailable to comment more regarding the merger between Pfizer and Allergan as the matter is still considered as confidential.