Pfizer to Buy Allergan for $160 Billion

by Crista Huff

President, Goodfellow LLC

Chief Analyst, Smart Investing in Turbulent Times

 

Global pharmaceutical company Allergan PLC (AGN, $302.56), maker of Viagra, has agreed to be acquired by global biopharmaceutical company Pfizer Inc. (PFE, $31.27), in a transaction valued at $160 billion. Allergan PLC will keep its Irish domicile, and change its name to Pfizer PLC. The company will thereafter no longer be required to pay U.S. income taxes. The merger is targeted to close in the second half of 2016.

AGN shareholders will received an approximate value of $363.63 per share, in the form of 11.3 PFE shares for each AGN share owned.

AGN is expected to complete the previously-announced sale of its generic unit to Teva Pharmaceutical Industries Ltd. (TEVA) in early 2016.

I wrote about this potential merger on October 29th. The stock already rose, during the rumor phase of the merger, and is not yet ready to rise toward the buyout value of about $364. Right now, the market is hesitant that the merger might not be completed. (Otherwise, the stock price would have shot up to $364 right away.) Shareholders should expect a slow share price increase toward $364, as we get closer to second half 2016.

If I owned AGN, I’d wait a few weeks to see if the share price increased. If the price languished, I would sell, and put my capital into an undervalued growth stock with a bullish chart, in order to keep that money moving.

If I had owned PFE, I would have sold it in late October when the merger rumors were prominent. When companies engage in significant purchases, their stocks usually trade sideways for many months, until they begin reporting combined quarterly results. Only then do analysts get a strong sense of the company’s new balance sheet situation, and prospects for earnings growth. If the numbers are attractive, institutional investors commence buying the stock.

Chart courtesy of StockCharts.com.

* * * * *

 

Goodfellow LLC is a subscription-based stock market website. Stock portfolio investors pay an annual fee to read my articles, which help them profitably navigate the U.S. stock markets, with the goal of outperforming the U.S. stock market indices.

I use a combination of strict fundamental and technical criteria to choose the stocks that receive buy ratings from Goodfellow LLC. Each facet of my investment criteria serves to lower the risk associated with stock investing. My investment strategy works — year in and year out.

 

Eight of the ten 2012-2014 Goodfellow LLC model portfolios

outperformed the market averages by margins of 50-100% and more!

 

Subscribe now, and begin improving your investment portfolio returns today!

Send questions and comments to research@goodfellowllc.com.

Happy investing!

 

Crista Huff

President

Goodfellow LLC

Chief Analyst

Smart Investing in Turbulent Times

 

* * * * *
Investment Disclaimer

Release of Liability: Through use of this website viewing or using you agree to hold www.GoodfellowLLC.com and its employees harmless and to completely release www.GoodfellowLLC.com and its employees from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur.

Goodfellow LLC and its employees are not paid by third parties to promote nor disparage any investment. Recommendations are based on hypothetical situations of what we would do, not advice on what you should do.

Neither Goodfellow LLC nor its employees are licensed investment advisors, tax advisors, nor attorneys. Consult with a licensed investment advisor and a tax advisor to determine the suitability of any investment.

The information provided herein is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. When information is provided herein from third parties — such as financial news outlets, financial websites, investment firms, or any other source of financial information – the reliability or completeness of such financial information cannot be guaranteed.

The information contained on this website is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. This is not an offer or solicitation for any particular trading strategy, or confirmation of any transaction. Statements made on the website are based on the authors’ opinions and based on information available at the time this page was published. The creators are not liable for any errors, omissions or misstatements. Any performance data quoted represents past performance and past performance is not a guarantee of future results. Investments always have a degree of risk, including the potential risk of the loss of the investor’s entire principal. There is no guarantee against any loss.