Actavis buys speciality Drugmaker forest labs for $25 bn

Generic Drugmaker Actavis said it would buy Forest Laboratories Inc for about $25 bn in cash and stock,expanding its portfolio of speciality Pharmaceuticals for neurological and other disorders .
The deal is a major for activist investor Carl Inahn, the second largest shareholder at Forest Labs,who waged two proxy battles and threatened a third to change its leadership and strategy.
Actavis said it would pay the equivalent of $89.48 per share , representing a premium of 25 to Forests Closing price. The offer comprises of $26.04 in cash and 0.3306 Actavis share for every Forest share.





Actavis expects the deal to add to its profits in the double-digit percentage in 2015 and 2016 including about $1 bn in tax and operating savings.
Actavis and Forest said in a joint statement on Tuesday that the combination could realise as much as $1 bn in synergies ,10 per cent will come via tax savings , with an estimated tax rate for the combined group in 2015 of 16 per cent.
Forest`s brings a diverse portfolio of treatments for disorders of the central nervous system ,digestive tract issues and Women`s health.
Developing drugs through Research and development may be expensive and this would minimise growth of earning of the company.