Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Actavis-Allergan deal avoids extended antitrust review, (Jan 12, 2015)

By Jeffrey May, J.D.

Specialty pharmaceutical company Actavis plc may proceed with its proposed acquisition of drug maker Allergan, Inc., without fear of an antitrust challenge from the federal antitrust agencies. Today, the companies disclosed that the FTC has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or HSR Act. A request from the merging parties for early termination is granted when the federal antitrust agencies have completed their review and determined not to take an enforcement action during the waiting period.

Actavis, which is headquartered in Dublin, Ireland, announced the transaction, valued at approximately $66 billion, in November 2014. Actavis said that its acquisition of U.S.-based Allergan “will create one of the top 10 global pharmaceutical companies by sales revenue.”

The combined company will have three blockbuster franchises each with annual revenues in excess of $3 billion in Ophthalmology, Neurosciences/CNS, and Medical Aesthetics/Dermatology/Plastic Surgery, it was noted. The specialty product franchises in Gastroenterology, Cardiovascular, Women's Health, Urology, and Infectious Disease treatments will have combined revenues of approximately $4 billion, according to the company.

In announcing the termination of the HSR waiting period, Actavis and Allergan noted that they had voluntarily withdrawn their initial HSR filing and subsequently re-filed with the agencies. Generally, the withdraw and refile procedure is followed to provide the reviewing agency additional time to consider the competitive impact of the transaction when the initial 30-day review period is about to expire. The practice can potentially avoid a costly and time-consuming “second request” from the government for additional information to analyze the transaction.

The move by Actavis to acquire Allergan followed a failed effort by Valeant Pharmaceuticals International, Inc., which markets pharmaceutical products primarily in the areas of dermatology, eye health, neurology, and branded generics, to take over Allergan. Allergan publicly resisted the takeover efforts. Valeant responded to the proposed merger agreement between Actavis and Allergan stating that it could not justify to its own shareholders paying the share price for Allergan that was offered by Actavis.

Around the time Valeant announced the proposed deal, a number of Senate lawmakers questioned the impact on competition that might result from a possible Valeant-Allergan tie-up. In June 2014, Senator Dianne Feinstein (D. Cal.) and others called on the federal antitrust agencies to take a close look at that transaction.

The Actavis-Allergan transaction still requires shareholder approval. The parties anticipate that the deal will close in the second quarter of 2015.

Companies: Actavis plc; Allergan, Inc.; Valeant Pharmaceuticals International, Inc.

News: AcquisitionsMergers Antitrust FederalTradeCommissionNews