Updated on 21 May 2013
Actavis will buy Warner Chilcott for $8.5 billion and create the third-largest US specialty pharma company
Singapore: US-based Actavis entered into a definitive agreement to acquire Dublin-based Warner Chilcott in a stock-for-stock transaction valued at approximately $8.5 billion. The new global specialty pharmaceutical company is expected to have a combined annual revenue of approximately $11 billion and will emerge as the third-largest US specialty pharmaceutical company with approximately $3 billion in annual revenues.
Actavis will swap 0.16 of a share for each Warner Chilcott share, valuing it at about $20.08 a share. The enlarged Actavis group will be led by the current Actavis management team. Warner Chilcott shareholders will hold about 23 percent of the company. The deal will help lower Actavis's relatively high effective tax rate, which should improve its global competitiveness. More than $400 million in after-tax operational synergies and related cost reductions and tax savings are anticipated, with most of those savings expected in 2014.
The acquisition of Warner Chilcott will strengthen Actavis's portfolio of drugs for women's health and urological conditions, and add new franchises in products for dermatology and gastroenterology. The deal will also help Actavis further diversify into patented and brand-name drugs.
Mr Paul Bisaro, CEO, Actavis, said that, "We wanted to get bigger in our brand business and this was a perfect opportunity for us. We have set as our strategic corporate objective to build a leading global specialty pharmaceutical company."
He also added, "The combination of Actavis and Warner Chilcott creates a strong specialty brand portfolio focused in therapeutic categories with strong growth potential, and is supported by a deep pipeline of development programs. The combination is commercially and financially compelling, and reshapes the specialty pharmaceutical universe by creating a powerful global competitor. It creates a company with an exceptionally strong balance sheet, coupled with a favourable tax structure to support future growth."