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Investment bank advising on AbbVie-Allergan deal set to collect $123M

Investment bank JPMorgan Chase & Co. is set to collect $123 million for its role in advising Allergan PLC as the Irish company prepares to be acquired by AbbVie Inc. for $84.2 billion.

JPMorgan will get the full amount of the fee — one of the largest ever paid out for advising on M&A — once the deal is completed. The bank has already received $12.5 million of the fee upon delivery of the opinion, Allergan said in a proxy statement released Aug. 12.

In comparison, Celgene Corp. paid JPMorgan $100 million for advisory services relating to its $95 billion acquisition by Bristol-Myers Squibb Co., which was announced at the beginning of the year.

For another megadeal — Bayer AG's acquisition of Monsanto that was completed in 2018 — Monsanto paid Morgan Stanley $120 million for the investment bank's advisory services in the $62.5 billion deal.

High termination fee

If AbbVie fails to complete the deal due to antitrust concerns, the Chicago company is on the hook to pay Allergan about $1.26 billion, which is 2% of the $63 billion value of the transaction without debt.

The termination fee is relatively in line with the Bristol-Myers' agreement with Celgene, which is set at $2.2 billion in case that deal falls through.

AbbVie and Allergan's CEOs went through several rejected offers over the course of about four months while the deal was being discussed, finally settling on $188 per share of Allergan, which represented a premium of about 44% at the time of the June 25 announcement.

SNL ImageAllergan CEO Brent Saunders
Source: Allergan

A multimillion-dollar promise

If AbbVie lets go of Allergan CEO Brent Saunders, he would walk away with $38.7 million, including $14.9 million in cash and $23.6 million in equity, according to the proxy statement.

Saunders' severance package also includes $54,000 in medical, dental and vision benefits that would continue after his departure. Also provided would be $100,000 in outplacement benefits, which allow for a smooth career transition.

The Allergan CEO will join AbbVie's board after the deal closes.

Other Allergan executives are set to collect big payouts if they should be let go, as well: CFO Matthew Walsh is in line for $14 million, Chief Commercial Officer William Meury for $13 million, Chief Research and Development Officer C. David Nicholson for $12.8 million and Chief Legal Officer A. Robert D. Bailey for $9.7 million.