Allergan agrees to $66 billion acquisition by Actavis

Confirming what were becoming ever stronger rumors over the weekend, Ireland-headquartered Actavis (NYSE: ACT) this afternoon said it has reached a definitive agreement to acquire Botox maker Allergan (NYSE: AGN), which has been hotly pursued by Canada’s Valeant Pharmaceutical (TSX: VRX), in partnership with hedge fund Pershing Square. Allergan’s shares rose 6.6% to $211 following the announcement.

Under the terms of the deal, approved by both firms’ boards of directors, Actavis will acquire Allergan for a combination of $129.22 in cash and 0.3683 Actavis shares for each share of Allergan common stock. Based on the closing price of Actavis shares on November 14, the transaction is valued at around $66 billion, or $219 per Allergan share.

The combination will create one of the top 10 global pharmaceutical companies by sales revenue, with combined annual pro forma revenues of more than $23 billion anticipated in 2015. Actavis anticipates that the expected permanent financing structure, consisting of a combination of new equity and debt, will support an investment grade rating and provide long-term financing flexibility.