Botox maker Allergan Inc. agreed to be acquired by Irish company Actavis for about $66 billion, apparently thwarting a hostile takeover attempt from a Canadian pharmaceutical firm.
The cash-and-stock sale would end decades of local ownership of Allergan, which was founded in 1950 – long before Irvine became a city.
Actavis agreed to pay significantly more than the roughly $54 billion that Valeant Pharmaceuticals International Inc. had offered – a deal that Allergan's board swiftly rejected.
In a statement, Valeant said it would not likely continue its fight to acquire the Botox company.
"While we will review any such agreement in determining our course of action, Valeant cannot justify to its own shareholders paying a price of $219 or more per share for Allergan," J. Michael Pearson, Valeant's chairman and chief executive, said in a statement.
Allergan Chief Executive David E.I. Pyott said the deal, approved by the boards of both companies, "provides Allergan stockholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company."
Investors cheered Monday's deal, driving up Allergan shares more than 5% to an all-time high of $209.20.
Allergan employees were also optimistic about the deal. While the merger will lead to job cuts, the downsizing is expected to be far less than Valeant had planned. Actavis said it would retain a significant presence in Irvine.
"It's a better feeling with Actavis," said an Allergan research-and-development employee, who asked not to be identified because he was not authorized by the company to speak to the media. "We all know Valeant's model was to come in and remove everything. We prefer the white knight [Actavis]."