The boards of Pfizer and Ireland’s Allergan on Sunday approved a merger deal worth $160 billion.
The deal would create the largest drugmaker by sales. It combines cash and stock and is expected to close in the second half of next year, pending customary approval.
Pfizer, based in New York, would gain a lower tax rate by moving its business to Ireland through the transaction, a strategy known as inversion that has grown more common among pharmaceutical companies. A prior attempt by Pfizer to strike an inversion deal failed when the company could not acquire Astra-Zeneca, which is based in London.
In an effort to take advantage of that lower tax rate, Pfizer and Allergan will be combined under Allergan, which will be renamed “Pfizer PLC.” Pfizer expects the combined firm would drop its current tax rate of 25% to an adjusted rate between 17% and 18%.