The acquisition, which will be the largest on record in the pharmaceuticals industry, is slated for completion in late 2016 pending regulatory approval in the United States and Europe. Under the terms of the deal, current Allergan shareholders will receive 11.3 shares per unit in the newly named Pfizer Plc for each of their existing Allergan shares, while current Pfizer shareholders will be allocated shares in the new company on a one-for-one basis.

Tax benefits

To avoid possible restrictions, the deal between the two companies has been structured as the smaller Dublin-based Allergan acquiring the larger Pfizer, though the new company will be named Pfizer Plc and will continue to be led by Pfizer chief executive Ian Read. As such, the new company will be headquartered in Dublin, and, crucially, will be subject to Ireland's corporate tax rate of 12.5 per cent. This is comparatively much lower than the 35 per cent corporate tax rate that Pfizer currently pays in the United States. According to Pfizer, the financial manoeuvre, known as an 'inversion deal', will deliver savings of around $2 billion for the newly merged company in its first three years.

Political controversy

As well as being the largest pharmaceutical merger in history, if approved the deal will also be the biggest-ever instance of a US-based company re-incorporating overseas in order to lower its taxes. As such, the creation of Pfizer Plc has drawn intense criticism from political figures in the US. Barack Obama has previously labeled such inversion deals as unpatriotic for channeling tax dollars away from the US and culling American jobs. Democratic presidential hopeful Hillary Clinton has also pledged to propose measures to prevent deals such as the Pfizer/Allergan merger from taking place, arguing that they 'leave US taxpayers holding the bag' while allowing large corporations to avoid '[paying] their fair share' in taxes in the US.

Unconfirmed job losses

Republican nomination candidate and business mogul Donald Trump has also slammed Pfizer's departure from the US, commenting that: 'The fact that Pfizer is leaving our country with a tremendous loss of jobs is disgusting.' It is as yet unconfirmed how many jobs will be lost as a result of the deal. Sources: BBC; Reuters