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Actavis, the world’s second largest generic drug maker by market value, is set to acquire drug company Forest Laboratories for $25 billion, it emerged on Tuesday, a further sign of consolidation in the global pharmaceutical industry.
The part-share, part-cash acquisition is a part of Actavis’ efforts to increase its profitability. The company, which is eyeing savings of around $1 billion dollars in the Forest acquisition, is depending on mergers and acquisitions to sustain profit growth due to the costly nature of research and development.
The deal, which is still subject to regulatory approval, would be a coup for billionaire investor Carl Icahn, who has held a seat on Forest’s board since 2012.
By acquiring the company, Actavis is also adding the Alzheimer’s drug Namenda and blood pressure pill Bystolic – two very successful and highly profitable drugs — to its product lineup.
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