The company said the offer from the Canadian drug maker was unsolicited. Valeant is partnering with hedge fund manager Bill Ackman in the deal.
In a news release, Allergan said its board of directors "will carefully review and consider the proposal and pursue the course of action that it believes is in the best interests of the company's stockholders."
Allergan said Goldman, Sachs & Co. and Bank of America Merrill Lynch are serving as financial advisors and Latham & Watkins is serving as legal counsel on the proposal.
Valeant, based in Laval, Quebec, disclosed details of the offer Tuesday in a news release.
Valeant will offer $48.30 in cash and 0.83 shares of its stock in exchange for each share of Allergan stock. At Monday's closing price, the deal would be worth about $152.89 per share, or $45.6 billion.
Shares of Allergan were up $22.95, or 16%, to $164.95 at 10:45 a.m. PDT, a sign that investors may want more for the company than Valeant and Ackman are offering.
Under the deal, Allergan shareholders would own 43% of the combined company, Valeant said. Ackman's firm, Pershing Square Capital Management, intends to “remain a significant long-term shareholder of the combined company,” Valeant said.
“Valeant and Pershing Square believe that the combination of the two companies is extremely compelling for both Allergan and Valeant shareholders and will create an unrivaled platform for growth and value creation in healthcare,” Valeant said in the news release.
The combined company would have an “unrivaled portfolio in ophthalmology, dermatology and aesthetics,” Valeant said. Last year, Valeant acquired Bausch & Lomb, making it one of the world's leading eye care companies.
Botox generated nearly $2 billion in sales for Allergan last year. The company is also a leading provider of eye medications, including Restasis, the only prescription medication for the treatment of chronic dry eye.
J. Michael Pearson, Valeant's chief executive, said: “Together, we can capitalize on the inherent strengths and complementary portfolios of our two companies, while achieving significant synergies by applying Valeant's unique operating model to a combined set of assets.”
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