Two large pharmaceutical companies, Actavis plc (NYSE:ACT) and Allergan, Inc. (NYSE:AGN) have finally got all the necessary clearances required to complete their merger formalities. The matter was pending before the European Commission who was finally convinced that all the required conditions were met.
The deal is set to be completed by Tuesday; however, Actavis has already initiated steps to rebrand itself as a ‘growth pharma’ company to gain an edge in the industry it. After the acquisition, it will become one of the 10 largest companies in this industry.
On due completion of the merger, it will be required that the entire company is restructured including part of its management. Another important feature is that the new entity will be called Allergan as a sign of respect to the branded pharmaceutical making company.
Previously, there was a hostile takeover bid by Valeant Pharma (NYSE:VRX) to acquire Allergan, but, Actavis managed to swing the deal in its favor. It subsequently made a commitment to save $1.8 billion by innovative cost saving techniques, most of which will be possible in the first year of operations. They also suggested that they would make continuous changes along the way for the betterment of the new company.
Other significant changes that will be implemented would include $450 million by avoiding duplicating of some manufacturing processes that are presently employed by both the companies. There will be another $475 million that will be offered that was promised by Allergan, when it was preventing itself from being taken over by Valeant Pharma.
Actavis is headquartered in Dublin; Ireland is known to specialize in the manufacturing of drugs used in the treatment of diseases of the central nervous system, women’s health, gastroenterology and cardiovascular ailments. Allergan, Inc. (NYSE:AGN) on the other hand, has a presence in more than a hundred countries, with over 10,000 workers. They are engaged in the business of manufacturing and marketing over the counter consumer products that include certain pharmaceuticals and medical devices.