Actavis To Acquire Forest Labs In $25 Bln Cash-stock Deal - Quick Facts

(RTTNews) - Specialty pharmaceutical company Actavis plc (ACT) and Forest Laboratories Inc. (FRX) announced Tuesday that they reached a definitive agreement by which Actavis will acquire Forest Laboratories for a combination of cash and equity valued at about $25 billion or $89.48 per Forest share.

The per share consideration represents a premium of approximately 25 percent per share over Forest's stock price, and a premium of approximately 31 percent over Forest's 10-day volume weighted average stock price, as of the close of trading on February 14, 2014.

In the proposed transaction, shareholders of Forest will receive 0.3306 shares of ACT common stock and $26.04 in cash for each share of Forest. The transaction will include an election mechanism for Forest shareholders to elect all-stock or all-cash consideration, subject to proration in accordance with the terms of the merger agreement. Forest shareholders are expected to own approximately 35% of the combined company on a pro forma basis.

If successfully completed, the transaction will combine two of the world's fastest-growing specialty pharmaceutical companies, with combined annual revenues of over $15 billion anticipated for 2015.

The combined company will be led by Paul Bisaro, Chairman and CEO of Actavis plc. The integration of the two companies will be led by the Actavis and Forest senior management teams, with integration planning expected to begin immediately in order to assure a rapid transition to a single company following close. Actavis has agreed that three members of the Forest Board of Directors will be named to the Actavis Board of Directors following the close.

The proposed transaction has been unanimously approved by the Boards of Directors of Actavis and Forest.

Actavis said it expects that the acquisition will generate double-digit accretion in 2015 and 2016, including approximately $1 billion in operating and tax synergies to be realized within three years following the close. These synergies exclude any additional revenue or manufacturing synergies. These synergies are in addition to standalone synergies announced publicly by Forest as part of its Project Rejuvenate and acquisition of Aptalis.