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A number of our posts this year have focused on large mergers; particularly those involving pharmaceutical companies. There’s a reason for this…they keep coming. In a prior post, we noted that the financial conditions for mergers has not changed given that interest rates have stayed the same. Also, it is unknown when these conditions will end, and the opportunities to increase profits for shareholders keep coming.

With that, another major merger is ostensibly in the making. Botox maker Allergan and Pfizer are discussing the possibility of joining forces. The potential merger could make Pfizer the largest drug maker in the world. It only trails Swiss drug maker Novartis AG for that coveted distinction. 

The potential for the deal to actually come to fruition is just as tenuous as the reasons for the merger. For Pfizer, it has seen its profits drop as competition from generic drugs has increased. Also, it may be that Pfizer seeks an inversion deal, where it may incorporate in a country with a lower tax bracket in order to save money.

Whatever the true reason may be, the story is yet another example of health care consolidation and they are not going to be the last corporate entities seeking a marriage of convenience. If your company is seeking a partner to merge with, or your corporation is the target of an acquisition, it is critical to have experienced legal counsel to advise you of the potential pitfalls that could derail the deal.

The preceding is not legal advice. 

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