Valeant Pharmaceuticals International, the Canadian-based company that bought Bausch & Lomb for $8.7 billion in the spring of 2013, has lost its long and bitter battle to take over Allergan. A global leader in generic and branded drugs based in Dublin, Ireland, Actavis, has won with a friendlier bid for Allergan. The transaction will be worth about $66 billion in cash and shares, and it will create one of the top ten pharmaceutical companies in the world, with combined annual revenues of more than $23 billion in 2015.

Despite the high price tag, Actavis estimates that the merger will be double-digit accretive to its earnings per share within the first 12 months, thanks to major synergies. Sales are expected to grow at a compound annual rate of more than 10 percent, generating free cash flow of more than $8 billion that should easily finance debt repayment. The group plans to invest more than $1 billion in new brand and product development to help achieve its growth objectives.

The acquisition has been unanimously approved by the board of directors of both companies and their management teams. Brent Saunders, president and chief executive of Actavis, will lead an expanded team of senior managers from Allergan and Actavis, following extensive discussions with David Pyott, chairman and CEO of Allergan. The current president of Allergan, Douglas Ingram, will report to Saunders as a special advisor to help in the integration process.

After the closing of the takeover, expected in the second quarter of 2015, all the sales and marketing activities of the expanded group will be split into three business units - International Brands, Branded Pharma and Allergan Medical - and each of them will be run by an executive. Notably, the International Brands business will be run by Paul Navarre, corporate vice president of Allergan and president of Europe, Middle East and Africa (EMEA). He will become an executive vice president of Actavis, reporting directly to Saunders.

Among other nominations, Alex Kelly, senior vice president and chief integration officer at Actavis, will work together with Sanjiv Patel, Allergan's corporate vice president of global strategic marketing and global health outcomes strategy and research, will share responsibilities for pre-integration planning, reporting to Saunders.

Valeant began to look for ways to bid for Allergan in the second quarter of this year. It improved its offer up to $200 for each share in Allergan, but the price and the methods used by Valeant to realize its bid have been steadily rejected by Allergan's board. Activis' offer gives Allergan a value of $219 per share. Valeant has decided that it could not justify paying a higher price. Valeant and Pershing Square Capital Management, which had been working with Valeant to take over Allergan, have sold all their shares in the company.

Meanwhile, Valeant has acquired the U.S. diagnostics subsidiary of Nicox, an international ophthalmic company, in a deal worth $20 million.