Big pharma, big phees

Investment banks led by Goldman Sachs to take $350m in fees from the Pfizer-Allergan mega-merger.

by Adam Gale

If a corporate merger is a marriage, then there needs to be someone to officiate, to make sure everything’s all legal and above board. In the case of the recently announced nuptials between pharma giants Pfizer and Allergan, the ‘vicar’ will in fact be the ‘vampire squid’ itself, Goldman Sachs, leading a team of five other investment banks. The combined fee for the service? A cool $350m (£232m) according to Thomson Reuters and Freeman Consultanting. No one ever said weddings were cheap.

The tie up between the two firms is set to be the second biggest in corporate history, after Vodafone’s takeover of Mannesmann at the height of the dot com boom. It’s perhaps no surprise that such an operation would be tricky (read: expensive) to execute, but this is astronomical, representing approximately 1% of the combined market cap of the two companies. And that’s not even including the cost of the nine law firms involved.

The reason it’s so steep is that this is a deal that US lawmakers have worked rather hard to make sure shouldn’t happen: a tax inversion that will save Pfizer a fortune and, in the words of Hilary Clinton, leave the US taxpayer ‘holding the bag’. Getting round the obstacle course of regulations requires devilish ingenuity and cold, hard cash.

Sign in to continue

Sign in

Trouble signing in?

Reset password: Click here


Call: 020 8267 8121



  • Up to 3 free articles every 90 days
  • Free email bulletins

Register Now

Take a free trial

Get 30 days unrestricted access to:

  • All the latest news, trends, and developments.
  • Exclusive interviews with CEOs and thought-leaders
  • MT Classroom - giving you an academic grounding without expensive courses
  • Management Matters and other in-depth content.
  • Daily bulletins straight to your inbox

Take a free trial today