Pfizer-Allergan Banks May Split $350 Million in Fee Windfall

Pfizer, Allergan Combine Operations
  • Pfizer set to pay financial advisers as much as $150 million
  • Allergan banks may win up to $200 million, Freeman says

Pfizer Inc. and Allergan Plc’s record-setting merger may yield as much as $350 million in fees for the bankers who helped pull off the largest-ever pharmaceutical deal.

Pfizer will probably pay $120 million to $150 million in fees while Allergan’s advisers will split $160 million to $200 million, according to estimates from consultants Freeman & Co. Goldman Sachs Group Inc., Centerview Partners, Guggenheim Partners and Moelis & Co. worked for Pfizer. Allergan was advised by JPMorgan Chase & Co. and Morgan Stanley.

The deal, valued at $160 billion, is the largest acquisition announced so far this year, making the payout the biggest this year, according to Freeman. The transaction was complex, structured so that Dublin-based Allergan is technically buying its much larger rival, in a move that would make it easier for Pfizer to relocate to a more attractive tax base in Ireland.

Goldman Sachs leads the advisory rankings so far this year with about $1.27 trillion in mergers and acquisitions, or a 37 percent market share, according to data compiled by Bloomberg. Morgan Stanley and JPMorgan round out the top three at $1.21 trillion and $1.19 trillion respectively.

A transaction of this size can have a huge impact on the league tables that rank banks’ merger-advisory practices. After the Allergan-Pfizer deal was announced, Guggenheim jumped to 11th from 16th and Moelis rose seven places to 12th, according to data compiled by Bloomberg. Centerview went to 10th from 11th in its share of global acquisitions this year.

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