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Guggenheim, JPMorgan clinch key roles in Pfizer-Allergan talks

NEW YORK/LONDON (Reuters) – Investment banks Guggenheim Partners LLC and JPMorgan Chase & Co have secured key roles in Pfizer Inc’s merger negotiations with Allergan Plc, according to people familiar with the matter, in what would be the biggest ever deal in the pharmaceutical sector.

Guggenheim is advising Pfizer alongside Goldman Sachs Group Inc, while JPMorgan is advising Allergan alongside Morgan Stanley, the people said on Monday. Other investment banks are also vying to secure roles, the people added.

The sources asked not to be identified because the financial advisory roles are not yet public. JPMorgan and Morgan Stanley declined to comment, while Pfizer, Allergan, Guggenheim and Goldman Sachs did not immediately respond to requests for comment.

Banks advising Allergan stand to collectively earn between $140 million and $180 million, while banks advising Pfizer could make between $80 million and $100 million in total, depending on the purchase price, according to estimates by consultancy Freeman & Co.

Pfizer, the No. 1 U.S. drugmaker, and Botox maker Allergan disclosed last week they were in friendly talks to merge. Pfizer and Allergan have market capitalizations of $215 billion and $122 billion respectively.

The deal, which is several weeks away from an agreement, would potentially set up Pfizer to take advantage of Ireland’s lower tax rates, where Allergan is domiciled, according to the sources. (Reporting by Greg Roumeliotis in New York and Pamela Barbaglia in London; Additional reporting by Carl O’Donnell in New York; Editing by Cynthia Osterman)