NEW YORK & DUBLIN— Pfizer Inc. (NYSE:PFE) and Allergan plc (NYSE:AGN) today announced that their boards of directors have unanimously approved, and the companies have entered into, a definitive merger agreement, according to the two companies. Under the agreement, Pfizer, a global innovative biopharmaceutical company, will combine with Allergan, a global pharmaceutical, in a stock transaction currently valued at $363.63 per Allergan share, for a total enterprise value of approximately $160 billion, based on the closing price of Pfizer common stock of $32.18 on Nov. 20, 2015.

Under the terms of the proposed transaction, the businesses of Pfizer and Allergan will be combined under Allergan plc, which will be renamed “Pfizer plc.” The companies expect that shares of the combined company will be listed on the New York Stock Exchange and trade under the “PFE” ticker. Upon the closing of the transaction, the combined company is expected to maintain Allergan’s Irish legal domicile. Pfizer plc will have its global operational headquarters in New York and its principal executive offices in Ireland.

The transaction represents more than a 30 percent premium based on Pfizer’s and Allergan’s unaffected share prices as of Oct. 28, 2015. Allergan shareholders will receive 11.3 shares of the combined company for each of their Allergan shares, and Pfizer stockholders will receive one share of the combined company for each of their Pfizer shares.

“The proposed combination of Pfizer and Allergan will create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world,” stated Ian Read, chairman and CEO of Pfizer.

“Allergan’s businesses align with and enhance Pfizer’s businesses, creating best-in-class, sustainable, innovative and established businesses that are poised for growth. Through this combination, Pfizer will have greater financial flexibility that will facilitate our continued discovery and development of new innovative medicines for patients, direct return of capital to shareholders, and continued investment in the U.S., while also enabling our pursuit of business development opportunities on a more competitive footing within our industry,” he said.

“The combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction that brings together two biopharma powerhouses to change lives for the better,” said Brent Saunders, CEO of Allergan.

“This bold action is the next chapter in the successful transformation of Allergan allowing us to operate with greater resources at a much bigger scale. Joining forces with Pfizer matches our leading products in seven high growth therapeutic areas and our robust R&D pipeline with Pfizer’s leading innovative and established businesses, vast global footprint and strength in discovery and development research to create a new biopharma leader.”

Pfizer plc’s board is expected to have 15 directors, consisting of all of Pfizer’s 11 current directors and four current directors of Allergan. The directors from Allergan will be Paul Bisaro, Allergan’s current executive chairman, Brent Saunders, Allergan’s current CEO and two other directors from Allergan to be selected at a later date. Ian Read, Pfizer’s chairman and CEO, will serve as chairman and CEO of the combined company. Brent Saunders will serve as president and chief operating officer of the combined company. He will be responsible for the oversight of all Pfizer and Allergan’s combined commercial businesses, manufacturing and strategy functions.

As a result of the combination with Allergan and subsequent integration of the two companies, Pfizer now expects to make a decision about a potential separation of the combined company’s innovative and established businesses by no later than the end of 2018.

Pfizer anticipates the transaction will deliver more than $2 billion in operational synergies over the first three years after closing. The combined company is expected to generate annual operating cash flow in excess of $25 billion beginning in 2018.

The completion of the transaction, which is expected in the second half of 2016, is subject to certain conditions, including receipt of regulatory approval in certain jurisdictions, including the U.S. and European Union, the receipt of necessary approvals from both Pfizer and Allergan shareholders, and the completion of Allergan’s pending divestiture of its generics business to Teva Pharmaceuticals Ltd., which Allergan expects will close in the first quarter of 2016.

Following the transaction, and assuming that all $12 billion of cash is paid in the merger, it is expected that former Pfizer stockholders will hold approximately 56 percent of the combined company and Allergan shareholders will own approximately 44 percent of the combined company on a fully diluted basis.