The Wall Street Journal reports,"Actavis PLC agreed to acquire rival drug maker Forest Laboratories Inc. in a cash-and-stock deal that values Forest at about $25 billion''.
''The proposed combination of Dublin-based Actavis and Forest of New York is partly designed to position the resulting company to deal with the changing health-care landscape in the U.S. Hospitals, insurers and doctors in the country are combining to make larger organizations that can negotiate directly to buy prescription drugs.
A combined Actavis-Forest could offer a range of generic and brand-name medicines, reaping economies of scale of its own.
Forest had a market capitalization of $19.3 billion as of Friday's close, compared with $33.4 billion for Actavis.
The deal values Forest at $89.48 a share, a 25% premium to Friday's close. That breaks down to $26.04 in cash and 0.3306 Actavis shares for each share of Forest''.
Actavis is known for its generic drugs, but it recently bought Warner Chilcott, a provider of branded treatments for gastrointestinal and urological conditions.
Forest has a gastrointestinal business, including the constipation drug Linzess. Forest also sells a number of brand-name drugs for neurological conditions like depression, as well as Bystolic for hypertension.
The combined company would be led by Actavis Chief Executive Paul Bisaro, while new Forest CEO Brent Saunders will join the board of the combined company. The company also said three members of the Forest board will be named to the Actavis board following the close.
The combined company is expected to have more than $15 billion in revenue for 2015, and the deal is expected to immediately add to adjusted earnings, with double-digit accretion in 2015 and 2016.
Forest shareholders are expected to own 35% of the combined company on an adjusted basis after the close of the deal, which is subject to regulatory approval but has been approved by the boards of both companies.
