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Illinois drugmaker AbbVie, with a bioresearch center in Worcester employing 900, is acquiring the Irish maker of Botox in a cash and stock deal worth $63 billion.
Per the agreement announced Tuesday, each shareholder of Dublin-based Allergan will receive a total of $188.24 per share in cash and stock awards. That price represents a 45% premium to Allergan’s closing price on Monday.
What effect on the company's Worcester operation, if any, was not immediately clear.
Abbvie will continue to be led by CEO and Chairman Richard Gonzalez, while two members of Allergan’s board, including CEO and Chairman Brent Saunders, will join AbbVie’s board.
When complete, 83% of the company will be owned by AbbVie shareholders and Allergan shareholders will make up the remaining 17%. Closing is expected in early 2020.
The deal creates a combined company that brought in $48 billion in revenue last year with an operating cash floor of $19 billion.
In a joint press release, the companies say the deal will provide immediate scale and profitability to AbbVie’s growth, including Allergan’s medical aesthetics business.
The transaction will allow AbbVie to reduce its reliance on its flagship autoimmune disorder drug Humira, which itself brought in $20 billion in 2018.
However, the drug is only expected to carry the company for so long, as AbbVie’s exclusive access to the Humira intellectual property ends in 2023, per settlement agreements with drugmakers Momenta and Pfizer.
"This is a transformational transaction for both companies and achieves unique and complementary strategic objectives," said AbbVie’s Gonzalez, in a statement. "The combination of AbbVie and Allergan increases our ability to continue to deliver on our mission to patients and shareholders. With our enhanced growth platform to fuel industry-leading growth, this strategy allows us to diversify AbbVie's business while sustaining our focus on innovative science and the advancement of our industry-leading pipeline well into the future."
Shares of AbbVie opened on the Nasdaq on Tuesday down more than 13% while Allergan was bumped up more than 27%.
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Worcester Business Journal presents a special commemorative edition celebrating the 300th anniversary of the city of Worcester. This landmark publication covers the city and region’s rich history of growth and innovation.
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