NEW YORK -- Actavis (IW 1000/500) Monday announced plans to acquire Botox-maker Allergan (IW 500/171) for $66 billion, creating a global pharmaceutical behemoth and likely ending the aggressive pursuit of Allergan by Canada's Valeant Pharmaceuticals International (IW 1000/679).
The combination creates a heavyweight in opthalmology, neurosciences and medical aesthetics that will be among the 10 biggest global pharmaceutical companies by sales, according to a joint Actavis-Allergan statement.
Valeant, which had joined hands with New York activist shareholder William Ackman in chasing Allergan, said it would not match Actavis's offer of $219 per share.
"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," Valeant CEO Michael Pearson said.
The premium in Monday's deal is a huge increase from the $46 billion that Valeant initially offered Allergan in April. Valeant subsequently raised the offer two times. Three weeks ago Valeant floated raising its bid to $60 billion or "at least $200 a share." But Valeant's board never showed interest in selling to the Canadian company, and repeatedly refused to meet with Valeant to discuss a deal.
The offer ran into headwinds in September when news reports said Allergan was in talks with Actavis, confirmed only at the beginning of this month.
Even so, the rich premium paid by Actavis will mean a hefty payday for the thwarted acquirers, especially Ackman, Allergan's largest shareholder with nearly 10% of outstanding stock.
Stock Has Skyrocketed
Shares of Allergan have soared to about $213 from $116.63 on April 10, before Ackman revealed his large stake. On paper Ackman now has a profit of $2.6 billion, with about 15% of that going to Valeant, according to Dow Jones Newswires.
Ackman declined comment Monday.
Actavis and Allergan said the deal would result in $1.8 billion in annual cost savings, improved marketing success by combining sales forces and expanded reach into key growth markets in Asia and Latin America.
Actavis, headquartered in Dublin but run from the US state of New Jersey, has a broad line of both generic and branded drugs.
The deal brings it control of Allergen's hit Botox treatment, popular globally to mask the effects of aging, as well as other looks-enhancing treatments like breast implants and facial fillers, and medical treatments to fight skin afflictions like acne.
"We will establish an unrivaled foundation for long-term growth, anchored by leading world-class blockbuster franchises and a premier late-stage pipeline that will accelerate our commitment to build an exceptional, sustainable portfolio," Actavis CEO Brent Saunders said.
Monday's transaction is subject to shareholder votes by both Actavis and Allergan. Allergan shareholders were scheduled to vote December 18 on a Valeant proposal to replace the Allergan board.
The companies expect the deal to close in the second quarter of 2015.
By John Biers
Copyright Agence France-Presse, 2014