Home / Market News / AbbVie confirms deal to buy Allergan for 45% premium, valuing Allergan at $61.7 billion

AbbVie confirms deal to buy Allergan for 45% premium, valuing Allergan at $61.7 billion

AbbVie Inc. confirmed Tuesday a deal to buy pharmaceutical company Allergan PLC , in a deal with valued at $63 billion. Allergan’s stock soared 30% in premarket trading while AbbVie shares tumbled 9.9%. Under terms of the deal, Allergan shareholders will receive 0.8660 and $120.30 in cash for each Allergan share they own, which based on Monday closing prices values Allergan shares at $188.24 each, a 45.3% premium. Based on 327.8 million shares outstanding as of May 3, the per-share bid represents a market-capitalization for Allergan of $61.71 billion. Earlier Tuesday, The Wall Street Journal had reported AbbVie was near a deal to buy Allergan for $188 a share, or over $60 billion. AbbVie expects the deal to provide annual synergies and other cost reductions of at least $2 billion, and is expected to be 10% accretive to adjusted EPS over the first full year following the close of the deal, which is expected to occur in early 2020. Allergan’s stock has dropped 11.5% over the past three months and AbbVie shares have slipped 1.3%, while the S&P 500 has gained 5.3%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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