The expected cost savings from the deal will buy both companies more time, but not solve their long-term issues as both company's blockbuster drugs have begun to face pressure from competition. (Photo: Shutterstock)
AbbVie Inc. has agreed to pay $63 billion for rival drugmaker Allergan Plc, the latest huge merger in a pharmaceutical sector rapidly being reshaped by deals.
Allergan will get $188.24 a share in cash and stock, a 45 percent premium to its closing price on Monday. Allergan shares rose 31 percent to $170.25 in premarket trading in the U.S. early Tuesday. AbbVie was down 8.2 percent to $72.
The takeover offers a solution to long-standing challenges both companies have grappled with. AbbVie finally gets a set of products big enough to diversify its revenue from Humira, the top-selling rheumatoid arthritis injection that dominates its sales. And Allergan, which is heavily reliant on Botox, will will get a profitable exit for shareholders after a four-year slide.
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