Pfizer shares end 2% up post $160 billion deal with Allergen

Shares of Pfizer surged over 8 per cent in trade on Tuesday after the US-listed Pfizer Inc and Botox manufacturer Allergan agreed to merge in a record $160 billion deal, creating a drug making behemoth, in the biggest buyout in the healthcare sector.

The stock ended 2.59 per cent up after hitting an intraday high of Rs 2648.00, up 8.63 per cent on Bombay Stock Exchange (BSE). However, US-listed Pfizer shares slipped 2.6 per cent and were the biggest drags on the S&P. Target company Allergan closed 3.4-per cent lower after the deal announcement.

The deal will technically see Dublin-based Allergan buying its much larger partner. It will allow New York-based Pfizer to shift base to Ireland for tax purposes.

The deal might have been described as a mega-merger in the pharma industry, but some of the leading analysts and pharma company executives in India told Business Today it doesn't hold much ground for Indian pharma companies.

First, it is a deal between innovators, and Indian companies are in the generics drugs business. Pfizer has its presence in India and Allergan, even less, and is really known for its ophthalmology products. One of its popular products in India is 'Refresh Tears,' an eye-lubricant. Globally, Allergan is also known the "Botox maker".

Meanwhile, US politicians condemned Pfizer Inc's deal with Allergan Plc as a tax dodge on Monday, bringing another round of hand-wringing in Washington over the corporate tax code, though legislative action before 2017 is unlikely.

(With inputs from agencies)