Salix terminates merger with Cosmo, now allegedly seeking deal with Actavis

3 October 2014

Gastrointestinal specialist Salix Pharmaceuticals (Nasdaq: SLXP) is reportedly seeking a deal with Ireland-headquartered generics major Actavis (NYSE: ACT) after terminating a merger agreement with Cosmo Pharmaceuticals (SIX: COPN).

Sources close to the companies, cited by news services such as Bloomberg, say that while the talks are under way, no transaction is imminent. The potential takeover of Actavis by Salix comes soon after Allergan’s efforts to acquire Actavis stalled due to valuation concerns.

The Cosmo-Salix merger, an all-stock deal valued at around $2.7 billion and undertaken in order to establish a “tax-efficent corporate structure,” was terminated due to recent changes in US tax rules. It had been agreed in July. Salix had a $9.6 billion market value as regular trading closed yesterday, and will be making a $25 million payment to Cosmo under the terms of the termination agreement.

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