Botox maker Allergan Inc. agreed to be acquired by Irish company Actavis for about $66 billion, apparently thwarting a hostile takeover attempt from a Canadian pharmaceutical firm.
The cash-and-stock sale would end decades of California-based ownership of Allergan.
Actavis agreed to pay significantly more than the roughly $54 billion that Valeant Pharmaceuticals International Inc. had offered — a deal that Allergan’s board swiftly rejected.
In a statement, Valeant said it would not likely continue its fight to acquire the Botox company.
“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,” J. Michael Pearson, Valeant’s chairman and chief executive, said in a statement.
Allergan Chief Executive David E.I. Pyott said the deal, approved by the boards of both companies, “provides Allergan stockholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company.”
On Monday, Allergan shares closed up $10.55, or 5.3 percent, to $209.20. Actavis shares closed up $4.17, or 1.7 percent, to $247.94.
Brent Saunders, CEO of Actavis, said the acquisition will immediately make Actavis “one of the world’s top 10 pharmaceutical companies.”
“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,” Saunders said in a statement.
The deal could be good news for some Allergan employees. Valeant had said Allergan was burdened by excessive and reckless spending and vowed to slash its workforce to make it more profitable. In response, Allergan announced in July that it would eliminate about 1,500 jobs.
Analysts have said that while the merger will likely lead to more job cuts, they will likely be less than Valeant had planned.
Allergan, founded in 1950 – long before its home base of Irvine became a city – originally focused on eye-care products before acquiring the rights to wrinkle-erasing Botox, its top-selling product.
The company has employees spread around the world, including at a newly opened facility in New Jersey.
About 2,300 of Allergan’s 11,000-plus worldwide employees are based at the company’s headquarters.
In addition to Botox, which generated nearly $2 billion in sales last year, Allergan sells ophthalmic medications, including Restasis, the only prescription drug approved to treat chronic dry eye. That drug produced nearly $1 billion in sales last year.
All told, Allergan reported revenue of more than $6 billion in 2013, a figure that’s expected to grow this year.