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Allergan CEO on the world's largest pharma merger

Last week, Jim Cramer learned that the much-discussed merger between Allergan and Pfizer is really happening. This would create the world's largest pharmaceutical deal, with $160 billion in an all stock transaction.

The deal stipulated that Allergan shareholders would receive 11.3 shares of Pfizer for every one share of Allergan.

"Even though I think this is a very smart deal, one that will give Pfizer a tremendous pipeline of new drugs along with a lower Irish corporate tax rate, the market initially seemed pretty skeptical," the "Mad Money" host said.

Allergan's stock initially sold off on the news, as investors worried what could be in it for them on the deal. However, since that time the stock has rebounded.

Yet many questions remain on how the transaction will reward Allergan shareholders, given how much the company already has going for it on its own. That is why Cramer decided to go straight to the source, and spoke with Allergan's CEO Brent Saunders.

Brent Saunders, CEO of Allergan.
Adam Jeffery | CNBC
Brent Saunders, CEO of Allergan.

"I think it's a great opportunity for our shareholders," Saunders told the "Mad Money" host. "The way I like to think about it, it is taking our growth pharma engine and put it on a larger chassis called Pfizer. Look, we could have gone to $400 [dollars per share] on our own, but this takes us well beyond that for the foreseeable future."

Saunders added that he believes the deep pipeline of Pfizer, along with its global footprint in various areas, will help to combine a great powerhouse in biopharmaceuticals.

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So what is in it for Allergan shareholders?

The new combined company will allow Allergan shareholders to have 44 percent ownership in the proforma company, while contributing approximately 25 percent revenue and 30 percent earnings before interest, tax and amortization.

"I think it's a great deal for our shareholders," Saunders said.

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