Pfizer in £106bn merger deal

US giant drugmaker Pfizer said it had agreed to merge with Irish rival Allergan in a deal worth 160 billion US dollars (£106 billion), making it the biggest deal in pharmaceuticals history.

The firms said the merger would create an industry leader that would have more than 100 treatments in mid to late stage development.

Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer investors will receive one share of the combined company for each of their Pfizer shares.

Last year Anglo-Swiss rival AstraZeneca fought off a £69 billion takeover bid from US rival Pfizer, saying the bid undervalued the business.

The merger is also the largest so-called inversion deal in corporate history, a tax-saving manoeuvre in which a US company reorganises in another country with a lower corporate tax rate.

The US corporate tax rate of 35% is one of the highest in the world, and compares with Ireland’s rate of 12.5%.

US efforts to curb the practice have so far proven ineffective.