Dublin-headquartered speciality pharmaceutical company Actavis is to acquire Allergan, the US manufacturer of Botox, for approximately US$66bn, or $219 per Allergan share.
Actavis said the deal would create one of the top 10 global pharmaceutical companies by sales revenue, with combined annual pro forma revenue of more than $23bn anticipated in 2015.
The transaction has been unanimously approved by the Boards of Directors of both companies.
Valeant Pharmaceuticals’ Chief Executive Michael Pearson, who had teamed up with investors potentially to buy Allergan, indicated that he would now walk away from the deal.
‘Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan,’ he said.
‘We 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.’
The combined company will have a strong balance sheet, growing product portfolios and broad commercial reach
Brent Saunders, CEO and President of Actavis, said the acquisition of Allergan would create 'the fastest-growing and most dynamic growth pharmaceutical company in global healthcare, making us one of the world’s top 10 pharmaceutical companies’.
He added: ‘The combined company will have a strong balance sheet, growing product portfolios and broad commercial reach extending across 100 international markets.
‘This is a financially compelling transaction. With pro forma revenues in excess of $23bn anticipated in 2015, this combination doubles the revenue generated by our brands business and doubles the international revenue of the combined company.
‘With this combination, we plan to transform the growth profile of our pharmaceutical business and have the ability to generate organic revenue growth at a compound annual growth rate of at least 10% for the foreseeable future.’
David Pyott, Chairman and CEO of Allergan, added: ‘We are combining with a partner that is ideally suited to realise the full potential inherent in our franchise. Together with Actavis, we are poised to extend the Allergan growth story as part of a larger organisation with a broad and balanced portfolio, a meaningful commitment to research and development, and a strong pipeline.’
The deal is expected to enhance Actavis’ growth in the US and internationally.
The combined company will be led by Saunders, with Paul Bisaro remaining as Executive Chairman of the Board.
This is a financially compelling transaction
The addition of Allergan’s portfolio, including multiple blockbuster therapeutic franchises, doubles the revenue of Actavis’ North American Specialty Brands business.
On a pro forma basis for full year 2015, the combined company will have three blockbuster franchises each with annual revenue in excess of $3bn in ophthalmology, neurosciences/CNS and medical aesthetics/dermatology/plastic surgery. The speciality product franchises in gastroenterology, cardiovascular, women’s health, urology and infectious disease treatments will have combined revenue of approximately $4bn.
Actavis said the transaction would generate at least $1.8bn in annual synergies from 2016, in addition to $475m of cuts previously announced by Allergan.
The Irish company also plans to maintain annual R&D investment of approximately $1.7bn to continue driving organic growth.
The combination is expected to add approximately 15 projects in near- and mid-term development to Actavis’ development portfolio.
Together Actavis and Allergan will have a commercial presence across 100 markets, including an enhanced presence across Canada, Europe, Southeast Asia and Latin America and a strong footprint in China and India.
The company will have approximately $5bn in pro forma 2015 international revenue.
The transaction is subject to the approval of the shareholders of both companies, as well as customary antitrust clearance in the US, the EU and certain other jurisdictions, and is expected to close in the second quarter of 2015.