Valeant Pharma's $13-bn Actavis deal put on hold

29 Apr 2013

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One of the biggest health care deals of the year has been put on hold after Canada's Valeant Pharmaceuticals International Inc and US-based generic drug maker differed  on the size of the cash premium to be paid in the over $13 billion all stock acquisition of Actavis Inc, DealBook reported late Saturday, citing a person briefed on the matter .
Valeant, Canada's biggest drug maker and one of the most aggressive acquirers, was in talks to buy Actavis for more than $13 billion, The Wall Street Journal (WSJ) over the weekend reported, citing people familiar with the matter. (See: Canada's Valeant Pharma in talks to buy Actavis for over $13 bn)

The WSJ had said that the deal was structured as a merger of equals despite a small premium component for Actavis shareholders, but the size of the premium appears to be one sticking point.

The talks had been weighed down by a number of concerns from Actavis directors, which included the size of the premium, DealBook said.

Actavis, the world's third-largest generic drugmaker, was established in January after New Jersey-based Watson Pharmaceuticals acquired it for around $5.60 billion, in order to expand in Europe.

Actavis, the maker of the generic version of Pfizer's Lipitor, has a market value of $12.9 billion and generated revenue of $5.9 billion last year, while Valeant has a market cap of $22.4 billion and annual revenues of $3.5 billion.

Actavis develops, manufactures and markets generic, branded generic, legacy brands and over-the-counter (OTC) products in more than 60 countries.

The company is ranked among the top 3 in 12 global markets, the top 5 in 16 global markets, and in the top 10 in 33 global markets.

Actavis has one of the broadest product portfolios and strongest pipelines in the generics industry. It has more than 750 molecules in 1,700 dosage combinations marketed globally through operations in more than 60 countries and around 40 per cent of its generic drug revenue comes from outside the US.

The company is in leading market positions in key established commercial markets and emerging markets in Central and Eastern Europe, Russia, the UK, France and Australia.

It has 30 manufacturing and distribution facilities around the world, including in China, India, Indonesia and Singapore.

Actavis Specialty Brands, formerly known as the Global Brands business, markets more than 40 brand pharmaceutical products, primarily in the US.

Actavis Pharma also develops and out-licenses generic pharmaceutical products outside the US through its Medis third-party business, the world's largest generic pharmaceutical out-licensing business. Medis has more than 300 customers globally, and offers a broad portfolio of more than 200 products.

Valeant has a product portfolio of about 490 products, and has two drugs in the top 200 drugs by sales in the US. Its main markets are in the US, Canada, Mexico, Brazil, Europe and Australia.

The Ontario-based company has made over 60 acquisitions since 2008. Its latest was done last month when it offered to buy Obagi Medical Products Inc, for about $344 million in order to boost its dermatology and plastic-surgery business.

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