Actavis to Acquire Allergan to Create Top 10 Global Growth Pharmaceutical Company with $23 Billion in Revenue

Actavis and Allergan have entered into a definitive agreement under which 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 14 November 2014, the transaction is valued at approximately $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.

"This acquisition creates the fastest growing and most dynamic growth pharmaceutical company in global healthcare, making us one of the world's top 10 pharmaceutical companies," said Brent Saunders, CEO and President of Actavis. "We will establish an unrivaled foundation for long-term growth, anchored by leading, world-class blockbuster franchises and a premier late-stage pipeline that will accelerate our commitment to build an exceptional, sustainable portfolio. The combined company will have a strong balance sheet, growing product portfolios and broad commercial reach extending across 100 international markets. Our combined experienced management team is dedicated to driving strong organic growth while capturing synergies and maintaining a robust investment in strategically focused R&D.

"This is a financially compelling transaction. With pro forma revenues in excess of $23 billion anticipated in 2015, this combination doubles the revenue generated by our brands business and doubles the international revenue of the combined company. Management is committed to maximising the potential for the combined company to drive industry-leading top and bottom line growth. With this combination, we plan to transform the growth profile of our pharmaceutical business and have the ability to generate organic revenue growth at a compound annual growth rate of at least 10% for the foreseeable future," added Saunders. "The combination is expected to generate strong free cash flow of more than $8 billion in 2016 and substantial growth thereafter, which will enable the rapid repayment of debt. We expect that the combination will result in double-digit accretion to non-GAAP earnings within the first 12 months."

"Today's transaction provides Allergan stockholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company," said David E. I. Pyott, Chairman and CEO of Allergan. "We are combining with a partner that is ideally suited to realise the full potential inherent in our franchise. Together with Actavis, we are poised to extend the Allergan growth story as part of a larger organisation with a broad and balanced portfolio, a meaningful commitment to R&D, a strong pipeline and an unwavering focus on exceeding the expectations of patients and the medical specialists who treat them. I am thankful for the hard work and dedication of our employees, and I'm confident they will make many valuable contributions to the combined company. Looking to the immediate future, all of us at Allergan are excited to roll up our sleeves and work closely with the Actavis team to ensure a smooth transition."

"This combination will greatly enhance our US and international commercial opportunities," said Paul Bisaro, Executive Chairman of Actavis. "In the US, the combination makes us more relevant to an even broader group of physicians and customers. Overseas, it will enhance our commercial position, expand our portfolio and broaden our footprint in Canada, Europe and Southeast Asia and other high-value growth markets, including China, India, the Middle East and Latin America."

The combined company will be led by Brent Saunders, CEO and President of Actavis, and Paul Bisaro will remain Executive Chairman of the Board. The integration of the two companies will be led by the senior management teams of both companies, with integration planning to begin immediately in order to transition rapidly to a single company. In addition, two members of the Allergan Board of Directors will be invited to join the Actavis Board of Directors following the completion of the transaction.