Valeant Buys Salix in over $10-Billion Pharma Merger Deal  

By on February 26, 2015

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Valeant Pharmaceuticals International Inc., a prominent Canadian pharmaceutical company agreed to acquire gastrointestinal drug manufacturer Salix Pharmaceuticals Ltd.  for about $10.1 billion announced the two companies this weekend.

The purchase of Salix, most known for its Irritable Bowel Syndrome drug, Xifaxan, was approved by the board of directors for both firms and the two companies said the deal had an enterprise price value of $14.5 billion, which includes Salix’s debts and on-hand cash. Valeant will pay approximately $158.00 a share, rounding out to the $10.1 Billion figure.

The merger is expected to yield more than $500 million in annual cost savings from the cost base of the combined company, said the press release regarding the merger.

The transaction is expected to close in the second quarter of 2015, and is subject to customary closing conditions and regulatory approval.

The mega-deal is the largest ever for Laval, Quebec-based Valeant, which lost a take-over bidding war for Allergan Inc last year. Valeant known for going after other firms and gobbling them up slowed its buying pace dramatically while it pursued Allergan, and Chief Executive Michael Pearson said last month that it would focus in 2015 on buying smaller, private companies.

British drugmaker Shire Plc as of last week had taken initial steps to acquire Salix and was working with advisers on a potential offer, according to people familiar with the matter. Endo International Plc had expressed interest but was rebuffed by Salix, according to a source. CNBC first reported on Friday that Valeant was close to a deal with Salix.