Shares in Allergan are shooting up by about 10% premarket based on reports that pharma giant Pfizer is looking to buy the Botox-maker.
The Financial Times and Wall Street Journal reported that Pfizer approached Allergan to discuss a possible deal. Both newspapers cited unnamed sources.
Allergan declined to comment on the issue. Pfizer said it “does not comment on market rumor and speculation.”
If a deal is struck in 2015, it could be the largest takeover of the year, eclipsing the $104 billion deal between Anheuser-Busch InBev and SABMiller in the beer industry. It could also be one of the biggest takeovers of all time, according to data from Dealogic and EY.
Based on Wednesday’s market value, Allergan is worth well over $110 billion.
Pfizer has a market value around $220 billion.
It’s all about tax?
In 2014, Pfizer pursued a takeover of the British pharmaceutical company AstraZeneca. But the American drugmaker had to drop its bid after AstraZeneca’s board repeatedly said the offers were not sufficient.
One factor driving Pfizer to pursue a takeover was related to taxes. Pfizer hoped to move its corporate base from the U.S. to the U.K., allowing it to pay British tax rates and save $1.4 billion annually, according to some analyst estimates.
So it’s no surprise to see that Pfizer may now be chasing Allergan, which is based in Ireland, a country that is known for low corporate taxes.