FTC digs deeper into Pfizer's proposed combo with Allergan

Not so fast, Pfizer ($PFE) and Allergan ($AGN). Regulators are looking for more information on their agreed-upon megamerger before allowing it to proceed.

On Wednesday, Pfizer said the pair had received a request for more details on its proposed combo from the Federal Trade Commission (FTC)--a request it says it "fully expected" as part of the merger process. Pfizer still expects to close the deal in the second half of this year.

It's no surprise the FTC is taking a close look at the transaction, which will see Allergan technically buy Pfizer to create the world's largest pharma company. The transaction will shift Pfizer's tax base abroad, a controversial move that's been condemned by U.S. politicians on both sides of the aisle.

Even if the drugmakers win the commission's favor, they'll still need multiple other signoffs. They'll have to snag governmental and regulatory OKs in other parts of the world, of course--including the EU--and shareholders of both Pfizer and Allergan will have to rubber-stamp the buyout in order to seal the deal.

But the factor that may wind up delaying the buyout most doesn't have anything to do with regulatory clearance--at least, not Pfizer's. The companies are waiting for Teva's $40.5 billion deal for Allergan's generics unit to wrap before they officially join up, and the Teva ($TEVA) buyout faces its own FTC-related slowdown.

Earlier this month, the Israeli drugmaker revealed that the acquisition may not close until June--well after the end-of-March timeline it had originally laid out. And the way Bernstein analyst Ronny Gal sees it, the agency is likely "the bottleneck," with the two sides working to hammer out which assets Teva will have to jettison in order to bring the transaction to the finish line.

- read the release

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