Valeant Pharmaceuticals International Inc is teaming up with activist investor Bill Ackman in a bid for Botox maker Allergan Inc that could be worth about US$40 billion.
Valeant said on Monday that it intends to propose a merger with Allergan using a combination of Valeant stock and cash. The transaction size has not been disclosed, but Valeant expects the cash portion of the deal to be at least US$15 billion.
Allergan said on late Monday it had no comment on the bid.
In a separate filing, Ackman’s Pershing Square Capital Management LP said it owns a 9.7 percent stake in Allergan worth US$4.1 billion. Ackman’s stake would make an Allergan deal worth about US$40 billion.
Valeant is one of Canada’s largest pharmaceutical companies, with revenue of US$5.8 billion last year. Headquartered in Laval, Quebec, it has pursued an aggressive acquisition strategy. It has racked up more than 50 deals since 2008.
In August last year, it completed an US$8.7 billion acquisition of Bausch + Lomb, giving it a major stake in the market for contact lenses, eye drugs and eye surgical devices. Before that, the company’s largest deals included a US$1.65 billion tie-up with Biovail Corp in 2010 and its US$2.6 billion acquisition of dermatology products maker Medicis Pharmaceutical Corp in December 2012.
Allergan, which is based in Irvine, California, has long been one of the star performers in the specialty pharmaceutical sector. “Specialty pharmaceutical” is an industry term that differentiates smaller drugmakers from much bigger companies that sell a wide array of drugs, such as Pfizer Inc and Merck & Co.
Allergan reported revenue of US$6.3 billion last year, up 12 percent from 2012. Growth has been driven by expanding use of Botox, combined with a broad offering of eye care drugs, skin care formulas and breast implants.
Last year, Botox sales rose 12 percent to nearly US$2 billion.