After months of fending off unwanted takeover advances from Valeant Pharmaceuticals, Allergan, the maker of Botox, is close to completing its strongest defensive move yet: selling itself to another bidder.
Allergan is near a deal to sell itself to Actavis for more than $62.5 billion, people briefed on the matter said Sunday, potentially ending one of the most bitter merger battles in recent memory.
Under the proposed terms of the transaction, Actavis would pay more than $210 a share in cash and stock, these people said.
At that size, a combination of the two would be one of the biggest transactions of the year, outpacing pending mega-mergers like Comcast’s takeover of Time Warner Cable and AT&T’s purchase of DirecTV.
It also would represent the latest move to reshape the health care sector through deal-making, with drugmakers looking to add to their product pipelines.
Perhaps most important, by striking a friendly deal with a white-knight bidder, Allergan is hoping to finally cut off the often-acrimonious campaign waged by Valeant since late April. Valeant, which has teamed up with the hedge fund magnate William A. Ackman, who runs Pershing Square Capital Management, is currently offering about $53 billion. The two first offered about $47 billion.
Allergan has consistently rebuffed Valeant’s entreaties. Its argument is that Valeant, a relentlessly acquisitive Canadian drugmaker whose growth strategy revolves in large part around striking ever-bigger deals, would cut numerous costs to make the deal work financially - including by clamping down on research and development.
Together, Allergan and Actavis reported $15 billion in sales last year and would have a combined market value of about $123.8 billion.
Actavis is no stranger to deal-making, having been formed by the merger of the US drugmaker Watson Pharmaceuticals and the Switzerland-based Actavis two years ago. Earlier this year, Actavis bought Forest Laboratories, the maker of brand-name drugs like Lexapro and Namenda. – (New York Times News Service)
