AbbVie to Purchase Allergan

Drugmaker AbbVie (NYSE:ABBV) said on Tuesday it would buy Botox-maker Allergan (NYSE:AGN) for about $63 billion, grabbing control of by far the biggest name in medical aesthetics to help reduce its reliance on blockbuster arthritis treatment Humira.

AbbVie has been under pressure to diversify its portfolio as Humira, the world’s best-selling drug, faces competition from cheaper versions in Europe.

Allergan CEO Brent Saunders put together the current version of the company through a series of deals to roll up several pharmaceutical firms in 2014, and has run the company since then.

He built his reputation as a dealmaker, but his company has struggled since Pfizer (NYSE:PFE) walked away from a $160 billion deal to buy Allergan in 2016. Allergan’s shares have lost around half their value since then.

Saunders has been under pressure over the last year to break up the company, with activist investor David Tepper running a campaign to urge Allergan to hire an independent chairman.

Allergan shareholders will receive 0.8660 AbbVie shares and $120.30 in cash for each share held, for a total consideration of $188.24 per Allergan share, a premium of 45% to the stock’s Monday close.

The deal, which is worth about $83 billion including debt, is expected to add 10% to adjusted earnings per share over the first full year following the close, the companies said.

The Wall Street Journal first reported news of the deal earlier Tuesday.

AbbVie shares were trading down $10.94, or 14%, at $67.48, while Allergan shares were up $36.08, or 27.9%. in early trading, to $165.58