A partnership between Canada’s Valeant Pharmaceuticals International Inc. and activist investor Bill Ackman has resulted in an offer that is sure to raise a few eyebrows. An unsolicited $47 billion bid to buy Botox maker Allergan Inc. The move would put the company on the path toward becoming one of the world’s five largest drug companies.
If the offer is accepted, it would bring together two mid-sized pharmaceutical companies with extensive industry experience in both skin car and eye care products. It’s worth noting that activist investors are not typically involved in deals such as this. Instead they buy stakes and push for changes in corporate management or business strategy. But that didn’t slow Allergan shares from jumping 17 percent in trading from eager investors expecting a sweet deal. Valeant also saw a 5 percent rise in stock.
“This proposal represents an undeniable opportunity to create extraordinary value for both Allergan and Valeant shareholders by establishing an unrivaled platform with leading positions in ophthalmology, dermatology, aesthetics, dental and the emerging markets” said Valeant Chief Executive Michael Pearson.
It will be interesting to see how this all develops. Both sides have a considerable amount to gain if the deal is successful. Then the discussion will be all about strategy.