Name: Allergan CEO Talks Mergers and Acquisitions Past and Future
Uploaded: 2015-11-11
Duration: 4 min 54 s
Description: Brent Saunders sits down with Fortune's Susie Gharib to discuss buying Actavis and his merger talks with Pfizer.

Brent, it's been a few months since you finally closed this huge deal between Allergan and Actavis. $ 66 billion, how's it going? It's going really well. We have settled out the management team. We have picked the R and D projects that we want to move forward. We picked the markets for investment. It's a big learning, we still have some work to do. But overall I'd say it's been a really A plus integration of two really different companies with a common objective. We're now hearing that Allergan and Pfizer have confirmed that you're in friendly talks of for. Possible merger. I know it's in the very early stages but what I'm wondering is, given all this good stuff that's going on with your company, I mean what more could you gain from joining forces with Pfizer that you don't already have? Yeah so to be clear we're very early preliminary discussions but We are in a really strong position as a stand alone company and we evaluate buying R and D assets, buying other companies, or combining with other companies all of the time. What is different here is because of Irish code when it was leaked we had to confirm it. So it is adding the public. But we're always looking at what makes sense for the future and I think when you think about combining with somebody, regardless of who it is, one of the things you look at, can you do more innovation, do you have more scale, can you sell more? Can you acquire better talent or more talent? And so those are the things, is you look at all these, but by no means is anything set in stone or certain. Well I mean there's been so much consolidation going on, that's been the theme of this year. Besides your big deal, Walgreen's, Rite Aid, [ UNKNOWN ], Humana, Sigma, [ UNKNOWN ], And the rationale for a lot of these deals is that size and scale are important. Given that [ UNKNOWN ] is already so big, is getting bigger gonna be better for your company, or is there are point at which bigger doesn't really make that much of a difference? Yeah, so size was never a goal for us or for me, and when you look at the pharmaceutical industry It is still fragmented, and that's what's so interesting here. We still have 30 companies of five billion in size or more. And ultimately, I do think as this industry continues to need to make big bets on innovation, for example Alzheimer's, a multiple billion dollar bets to solve for Alzheimer's. We're going to need more scale, and so, much like the airlines or telecommunications or technology companies, banks, telecommunications, you name it, we're going to get down to a very large global companies, perhaps 4 to 6 And then a bunch of really small, science based companies that have platform science that gets leverage by the big guys. And you're supportive of that? Well, I think it's the right thing. We're now moving into the age of biology, and as we move into the age of biology, the risks and the bets on the science are massive. And we need to take them, and we need to take them in a way that we can mitigate that risk over a broader base. And so that's the only area where I think size does really matter. One of the things that we've been hearing from Pfizer's CEO is that high U. S. corporate taxes are making American companies at a competitive disadvantage with other companies. And this is one of the reasons that they're talking to you about locating outside of the United States. Are you supportive of more and more companies doing these so- called tax inversions ?>> Well I think we should step back from that for one second and say why are companies doing it? Why are companies looking at inversion versus other tax mitigation? Strategies and it has a little bit to do with rates, but it mostly has to do with the territorial nature of the U. S. tax system. And the United States and perhaps, North Korea, are one of the few countries that have a territorial system. France, the U. K ., China, Japan, all have global tax systems. And so, the fact that we are trying to tax our corporations as if they're a US company, no matter where they operate, is really anti- competitive. And I think that's the thrust of what I've heard from the Pfizer CEO. And that's the part that I think is Putting American- based corporations at a competitive disadvantage versus global companies. So, let's say for some reason, magically, corporate tax rates came down dramatically, do you think that you would still be talking to Fizer about doing a deal? Is this about tax benefits or is this because it makes good business sense? Yes, so I think about any combination as strategic first. Can you increase your commercial presence? Do you get access to markets you wouldn't have had otherwise for your products? Do you get Stronger capabilities for your people. And once you have that, then you start to look at all the other cost synergies and the like that make the deal valuable. [ BLANK_AUDIO ]

Brent Saunders sits down with Fortune's Susie Gharib to discuss buying Actavis and his merger talks with Pfizer.

Allergan CEO Talks Mergers and Acquisitions Past and Future

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Saunders on buying Actavis and merger talks with Pfizer.