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FTC Looks Closer at Pfizer/Allergan Merger

05.04.2016 -

The US Federal Trade Commission (FTC) has asked Pfizer and Allergan for more information in relation with its antitrust review of their proposed merger.

The so-called second request, which both companies said they fully expected as part of the regulatory process, lengthens the FTC’s scrutiny of how the merger will affect market competition.

Regulators will look closely at drug overlaps in the two portfolios. Observers said one area of examination could be biosimilars. The FTC may require divestments of products in which the combined company has a monopoly or unfair advantage versus its competitors.

Bloomberg Intelligence analyst Jennifer Rie said: “Mergers of large pharma companies are complex because the FTC looks at overlaps molecule by molecule and also any pipeline overlaps.”

The companies said they continue to work cooperatively and expeditiously with the FTC in connection with its review. They still expect the transaction to close in the second half of 2016.

Pfizer struck the $160 billion deal with Allergan last November in what would be the largest-ever merger in the pharmaceutical industry. If approved, Pfizer would move its official headquarters from New York to Allergan’s base in Ireland – a so-called inversion enabling it to reduce its income tax liability.