@themotleyfool #stocks $AGN $ABBV, AbbVie's Pending Acquisition of Allergan Earns FTC Approval. Keith began writing for the Fool in 2012 and focuses primarily on healthcare investing topics. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Allergan’s efforts to protect other brands have stumbled. Let's conquer your financial goals together...faster. Along with Bristol-Myers’s deal for Celgene, Japan’s Takeda Pharmaceutical Co. earlier this year completed a $62 billion takeover of Shire Plc. Allergan sells a range of products, but it has also struggled to diversify beyond its line of aesthetic medications and Botox, which has brought in billions of dollars with its expanded use beyond smoothing frown lines to treat migraine headaches and other health conditions. The Allergan acquisition is being made to reduce AbbVie's dependence on Humira, but the immunology drug will still contribute close to 40% of the company's total revenue even after the Allergan transaction closes. Cumulative Growth of a $10,000 Investment in Stock Advisor, Should You Buy Allergan Before the AbbVie Acquisition Closes? Returns as of 09/24/2020. While they use cost savings from the deal to shore up profits, the companies will still be under pressure to show investors they can come up with the next big thing. Market data powered by FactSet and Web Financial Group. AbbVie said it expects at least $2 billion in annual pretax synergies and other cost reductions in year three of the deal. One drug considered to be a contender to replace some of Humira’s sales over the long term is AbbVie’s Skyrizi, a new psoriasis treatment that many patients may find more convenient than Humira, as it needs to be injected less frequently. While there are few major areas of overlap between Allergan and AbbVie, the deal is almost certain to get a careful look from regulators. Today, though, AbbVie's shares are trading more than 10% higher than they were seven months ago. The proposed takeover doesn’t give AbbVie a pipeline full of potential blockbuster drugs, but it buys the company time to develop more. However, I think that the second reason listed to buy Allergan right now makes sense. AbbVie's shareholders will own 83% of the combined entity. AbbVie Inc. agreed to pay $63 billion for rival drugmaker Allergan Plc, the latest merger in an industry where some of the biggest companies have been willing to pay a big premium to resolve questions about their growth prospects. AbbVie Strikes Deal With the FTC to Move Its Allergan Acquisition Forward, Editas and Allergan Make Gene-Editing History With First Treatment of Blindness Drug, Copyright, Trademark and Patent Information. Morgan Stanley & Co. acted as AbbVie’s financial adviser and Kirkland & Ellis LLP and McCann FitzGerald were legal advisers. Have a confidential tip for our reporters? The big drugmaker assumed Allergan's long-term debt of close to $17.6 billion. These transaction terms should be at the forefront of investors' minds when considering whether or not to buy Allergan stock. PJT Partners Inc. was a co-financial adviser to AbbVie. The Federal Trade Commission, which oversees mergers and acquisitions, appears to be taking a closer look at these deals. Long-term investors thinking about buying Allergan stock should focus even more on AbbVie's prospects. The 2017 U.S. tax overhaul cut corporate levies to 21% from 35%, which reduced incentives for companies to relocate overseas. Father, Son Used-Car Sellers Get $5 Billion Richer in a Day, Stocks Whipsaw as Traders Weigh Odds of Stimulus: Markets Wrap, JPMorgan to Move $230 Billion Assets to Germany Under Brexit, A 32-Year-Old Finance Tycoon Looms in Obscure Stock Market, HSBC Loyalists Lose Faith After Stock’s $83 Billion Plunge. Read more: AbbVie’s $38 bill deal loan is 10th largest ever. The deal is expected to close anytime here in May. Earlier this year, Bristol-Myers Squibb Co. faced opposition from some top investors to abandon its $74 billion acquisition of Celgene Corp. While the company is run from New Jersey, it moved its domicile to Dublin in 2015 via another merger, partly to take advantage of lower corporate rates abroad.