Pfizer and Allergan have entered into a definitive merger agreement in a stock transaction currently valued at $363.63 per Allergan share, for a total enterprise value of about $160 billion, based on the closing price of Pfizer common stock of $32.18 on Nov. 20. The transaction represents more than a 30% premium based on Pfizer's and Allergan's unaffected share prices as of Oct. 28. Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share of the combined company for each of their Pfizer shares.

"The combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction that brings together two biopharma powerhouses to change lives for the better," said Brent Saunders, Chief Executive Officer, Allergan. "This bold action is the next chapter in the successful transformation of Allergan allowing us to operate with greater resources at a much bigger scale. Joining forces with Pfizer matches our leading products in seven high growth therapeutic areas and our robust R&D pipeline with Pfizer's leading innovative and established businesses, vast global footprint and strength in discovery and development research to create a new biopharma leader."

The businesses of Pfizer and Allergan will be combined under Allergan, which will be renamed "Pfizer." The combined company is expected to maintain Allergan's Irish legal domicile. Pfizer will have its global operational headquarters in New York and its principal executive offices in Ireland.

Pfizer's innovative businesses will be significantly enhanced by the addition of a growing revenue stream from Allergan's durable and innovative flagship brands in desirable therapeutic areas such as aesthetics and dermatology, eye care, gastrointestinal, neuroscience and urology. With the addition of Allergan, Pfizer will enhance its R&D capabilities in both new molecular entities and product line extensions. A combined pipeline of more than 100 mid-to-late stage programs in development and greater resources to invest in R&D and manufacturing is expected to sustain the growth of the innovative business over the long term. Through product approvals, launches and inline performance the combined company aspires to be a leader in growth.

The combination of Pfizer and Allergan will significantly increase the scale of Pfizer's established business, and their complementary capabilities will maximize the combined established portfolio. The addition of Allergan's Women's Health and Anti-Infectives portfolio will add depth to Pfizer's established business, and Pfizer will expand the reach of Allergan's established portfolio using its existing commercial capabilities, infrastructure and global scale. In addition, Allergan brings topical formulation, manufacturing and its Anda distribution capabilities to the combined company.

As a result of the combination with Allergan and subsequent integration of the two companies, Pfizer now expects to make a decision about a potential separation of the combined company's innovative and established businesses by no later than the end of 2018.

Independent of the transaction and consistent with 2015, Pfizer anticipates executing a $5 billion accelerated share repurchase program in the first half of 2016. Pfizer has $5.4 billion remaining under its previously announced repurchase authorization.

The completion of the transaction, which is expected in the second half of 2016, is subject to certain conditions, including receipt of regulatory approval in certain jurisdictions, including the U.S. and E.U., the receipt of necessary approvals from both Pfizer and Allergan shareholders, and the completion of Allergan's pending divestiture of its generics business to Teva Pharmaceuticals, which Allergan expects will close in the first quarter of 2016.

Pfizer's board is expected to have 15 directors, consisting of all of Pfizer's 11 current directors and four current directors of Allergan. The directors from Allergan will be Paul Bisaro, Allergan's current executive chairman; Brent Saunders, Allergan's current chief executive officer; and two other directors from Allergan to be selected at a later date. Ian Read, Pfizer's chairman and CEO, will serve as chairman and CEO of the combined company. Brent Saunders will serve as president and chief operating officer of the combined company. He will be responsible for the oversight of all Pfizer and Allergan's combined commercial businesses, manufacturing and strategy functions.