If completed, the transaction will create a company with approximately US$11 billion in combined annual revenue, and the third largest US specialty pharmaceutical company with approximately US$3 billion in annual revenues focused on core therapeutic categories of women’s health, gastroenterology, urology and dermatology. The proposed transaction has been unanimously approved by the Boards of Directors of both Actavis and Warner Chilcott and is supported by the management teams of both companies. Under the deal, Warner Chilcott shareholders will receive 0.16 shares in Actavis for each share they own, equivalent to US$20.08 per share.

The merger will create a ‘powerful global competitor … with an exceptionally strong balance sheet’ and perhaps more importantly ‘a favourable tax structure to support future growth’, according to Mr Paul Bisaro, President and CEO of Actavis. The deal will reduce Actavis’ tax bill, with the Irish company having a lower tax rate and is expected to save Actavis more than US$400 million in after-tax operational synergies and related cost reductions and tax savings in 2014/2015.

Recently, Actavis has also been the subject of takeover offers from Mylan and Valeant Pharmaceuticals International, with the latest approach rumoured to be coming from pharma giant Novartis, which is said to be offering US$16 billion for the generics maker.

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