Actavis PLC (ACT) is in talks to buy rival drug maker Forest Laboratories (FRX) in a deal potentially worth $25 billion.
The merger would create a company with forecasted revenues to be at about $15 billion by 2015 and free cash flow of over $4 billion.
ACT stock is up 8% pre-market on the news. FRX stock is up 30%.
The official announcement could come today.
The deal would be the second largest for a U.S. public company this year, after last week’s $45.2 billion Comcast deal with Time Warner.
Actavis plc Ordinary Shares will pay $89.48 per share, comprised of $26.04 in cash and 0.3306 of an Actavis share. The price represents a premium of 25% over Forest Laboratories … close on Friday of $71.39. …The firms project potential operating and tax synergies of $1B, not including manufacturing or revenue synergies.
Actavis CEO Paul Bisaro will lead the new firm, while Forest CEO Brent will join Actavis’ board. In total, three Forest directors will gain seats on Activis’ board.”
The combined company would create a vast product franchise in the areas the companies deal: gastroenterology, women’s health, urology and cardiovascular therapy.
The move would help both companies better position themselves in global outreach.
Actavis is amid a business reorganization plan. The drugmaker is looking to segue into being a speciality pharma firm focusing on developing drugs that aid women’s health including treatments for “urology, gastroenterology and dermatology” related ailments.
