AbbVie Must Pay up to $11.3B to Acquire Allergan

Deal Will Create a Leader in Immunology and Neuroscience

Purchase Price Could Rise to $63B in Milestone Payments

AbbVie announced Monday that it will acquire Allergan, a maker of Botox and other well-known drugs, for as much as $63 billion. The deal is expected to close in early 2020.

The agreement is AbbVie's largest acquisition since its 2013 purchase of Pharmacyclics for $21 billion. With Allergan, AbbVie will gain access to a portfolio of drugs that includes Botox, Juvederm, and Ozurdex.

AbbVie said it will pay $11.3 billion for Allergan in cash — $10.4 billion to Allergan shareholders, and $893 million to Allergan bondholders. In addition, AbbVie will pay additional payments of up to $51.7 billion to Allergan shareholders, if certain milestones are met.

AbbVie also said it expects to incur $300 million in one-time costs, primarily related to integration costs.

The deal will give AbbVie control of a company that has been under pressure from activist investors to improve its performance. Allergan's stock has declined in recent years amid concerns about its debt load and its ability to develop new drugs.

The acquisition will also give AbbVie a larger presence in neurology and immunology, two areas where it is already strong. AbbVie's drugs include Humira, a treatment for rheumatoid arthritis, and Botox, a treatment for migraines and other conditions.

AbbVie said it expects the deal to close in early 2020. The transaction is subject to approval by Allergan's shareholders and regulators.