Actavis acquires Allergan for approximately $66 billion

November 18, 2014

The healthcare community has been watching the Valeant Pharmaceuticals-Allergan deal closely over the last few months, but that has come to an end with Irish pharmaceutical company Actavis acquiring Allergan for approximately $66 billion, or $219 per Allergan share.

Dublin, Ireland-The healthcare community has been watching the Valeant Pharmaceuticals-Allergan deal closely over the last few months, but that has come to an end with Irish pharmaceutical company Actavis acquiring Allergan for approximately $66 billion, or $219 per Allergan share.

The companies entered into a definitive agreement under which Actavis will acquire Allergan for a combination of $129.22 in cash and 0.3683 Actavis shares for each share of Allergan common stock.  According to the companies, the deal will create one of the top 10 global pharmaceutical companies by sales revenue, with combined annual pro forma revenues of more than $23 billion anticipated in 2015. The transaction has been unanimously approved by the Boards of Directors of Actavis and Allergan and is supported by the management teams of both companies. 

Valeant acquires Nicox Inc.

“Today's transaction provides Allergan stockholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company," says Allergan CEO David E. I. Pyott. “We are combining with a partner that is ideally suited to realize the full potential inherent in our franchise. Together with Actavis, we are poised to extend the Allergan growth story as part of a larger organization with a broad and balanced portfolio, a meaningful commitment to research and development, a strong pipeline, and an unwavering focus on exceeding the expectations of patients and the medical specialists who treat them.”

Following the completion of the acquisition, the combined company will be led by Brent Saunders, CEO and president of Actavis, and Paul Bisaro will remain executive chairman of the board. The integration of the two companies will be led by the senior management teams of both companies, with integration planning to begin immediately in order to transition rapidly to a single company. Additionally, two members of the Allergan Board of Directors will be invited to join the Actavis Board of Directors following the completion of the transaction.

 

“Actavis projects that the transaction will generate at least $1.8 billion in annual synergies commencing in 2016, in addition to the $475 million of annual savings previously announced by Allergan in connection with Project Endurance,” according to a statement from Actavis. “Actavis also plans to maintain annual R&D investment of approximately $1.7 billion, ensuring the appropriate resource allocation to continue driving exceptional organic growth.” 

Valeant began its bid for Allergan in May, offering $48.30 in cash and 0.83 of Valeant stock for each Allergan share. The companies went back and forth for months as Allergan resisted the takeover bid, despite its largest shareholder Pershing Square Capital supporting the deal. Last month, Valeant released a statement saying it would be willing to increase its offer for Allergan to $200 per share. After Allergan’s deal with Actavis was announced, Valeant CEO J. Michael Pearson released a statement, saying the company “will remain focused on delivering strong organic results and evaluating acquisition opportunities as we always have: prudently, in a disciplined manner, and in the best interests of our shareholders.”

“We have seen the announcement that Allergan and Actavis have made, and while we will review any such agreement in determining our course of action, Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan,” he says.  

According to The New York Times, Pershing Square Founder William Ackman now stands to collect about $2.2 billion with the completion of the Allergan-Actaivs deal after he acquired about 9.7 percent of Allergan’s stock while attempting to push the Valeant deal through.