Actavis’ Big Bet On A Diversified Hybrid Model
Actavis’ proposal to buy Forest Labs for $25 billion in stock and cash was driven by consolidating customers and fierce competition in traditional Western markets. Different pressures, namely the tough-to-manage patent cliff, as well as leadership succession issues and investor unrest, drove Forest into the arms of a suitor.
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The deal to combine Pfizer and Allergan was the culmination of 16 months of negotiations, beginning with a dinner between Ian Read and Brent Saunders in July 2014, well before the company that was then Actavis had even disclosed its interest in merging with Allergan.
The growing spec pharma has seen a 300% increase in its branded portfolio revenues since the acquisition of Forest and Warner Chilcott and is honoring the new direction by taking on the name of its most recent acquisition.
The pharma industry in 2014 products its biggest M&A year in recent history, though it may be remembered equally for sagas and upsets that failed to materialize into finalized deals. Actavis was the most aggressive acquirer, buying Forest and Allergan for a total of $89.3 billion in the two most expensive deals of the year.