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How the Pfizer-Allergan deal has completed healthcare's M&A explosion

The pharmaceutical merger and acquisition (M&A) activity has been on a record-breaking pace throughout the year, and it recently just got the icing ...

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|Nov 24|magazine7 min read

The pharmaceutical merger and acquisition (M&A) activity has been on a record-breaking pace throughout the year, and it recently just got the icing on the cake.

Drugmaking giant Pfizer is close to completing its deal to purchase Allergan for over $150 billion, which will bring the total value of healthcare mergers and acquisitions to over $600 million in 2015.

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That would be a record-breaking achievement for the sector, as large pharmaceutical companies have been buying smaller competitors in mass since 2014. This latest arrangement will put healthcare ahead of both technology and energy as the top deal-making sector.

The deal between Viagra-producer Pfizer and Botox-maker Allergan is the largest ever in the healthcare industry, topping Pfizer’s purchase of pharma company Warner-Lamebert for $90 million back in 1999.

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It is also the second-biggest deal of all time overall, eclipsing Anheuser-Busch’s $117 million purchase of SABMiller earlier in the year. The only larger merger was British telecom giant Vodafone’s $172 million purchase of Germany’s Mannesmann in 2000.

Pfizer is heavily involved in M&A, as it has been involved in six of the pharmaceutical industry’s top-20 deals. It will also make Pfizer the biggest drug company in the world with 110,000 employees, $63.5 billion in sales and $9 billion in yearly research spending.

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With just over five weeks remaining in 2015, this year’s M&A value is up to $3.42 trillion, matching the total from all of 2007. Eight transactions this year are worth over $50 billion, while there were only two deals of that size in 2014 and one in 2013.

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