Valeant, Pershing Square partner to acquire Allergan

Pershing Square Capital Management CEO William Ackman has collaborated with Canadian drug-maker Valeant Pharmaceuticals to jointly acquire wrinkle-treatment maker Allergan.

The transaction, which is valued about $42bn, follows the failed attempts by Valeant to buy the skin-care firm.

The acquisition would strengthen position of Valeant in the skin care segment as the pharmaceutical company is planning to soon finalise its proposal.

Following completion of the deal, the two mid-sized pharmaceutical companies would combine their expertise in skin care and eye care products to offer better products.

Allergan, which also has a lucrative portfolio of ophthalmic drugs to treat conditions such as glaucoma and dry eye, is larger by revenue, reporting $6.3 billion in sales last year.

Valeant shareholder and Brave Warrior Advisors managing director Glenn Greenberg said, "It’s almost impossible to turn it into a high return investment if you pay that kind of price."

The move is also expected to support Valeant’s earlier transaction of buying Bausch & Lomb Holdings.

Currently, Pershing Square owns 9.7% Allergan shares that it bought in February 2014 with an expenditure of about $4bn, according to a regulatory filing.

Allergan produces a portfolio of personal care products including ophthalmic drugs to treat conditions such as glaucoma and dry eye and the company had reported sales of $6.3bn in 2013.

In 2013, Valeant had reported generation of $5.8bn in revenue.