Actavis and Warner Chilcott leap on merger talks; possible bid for Adcock Ingram

13 May 2013

US generics major Actavis NYSE: ACT) confirmed on Friday (May 10) that it has entered into early stage discussions with Ireland-based Warner Chilcott (Nasdaq: WCRX) regarding a potential combination of the two companies. Actavis further stated that no agreement has been reached and it does not intend to issue further comment regarding its business development initiatives. A similar statement was issued by Warner Chilcott.

Warner Chilcott shares leapt 20%, to close at $18.01. According to FactSet, the company's market capitalization stood at $3.76 billion as of Thursday's close and rose to about $4.51 billion on Friday. Actavis shares rose 12.2%, to close at $119.86 after reaching an all-time high of $121.13.

Last month, rumors emerged that acquisitive Canadian drugmaker Valeant Pharmaceutical (TSX: VRX) is in talks to buy Actavis for more than $13 billion (The Pharma Letter April 28). However, a proposed merger was put on hold after the two drugmakers failed to agree on terms of a deal that would have created a health care giant with a combined market value of $35 billion, a person familiar with the situation told Reuters at that time.

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