Actavis Inc. (ACT) and Warner Chilcott plc (WCRX) announced Monday that they have entered into a definitive agreement by which Actavis will acquire Warner Chilcott plc in a stock-for-stock transaction valued at about $8.5 billion.
The proposed transaction has been unanimously approved by the Boards of Directors of Actavis Inc. and Warner Chilcott plc, and is supported by the management teams of both companies.
At the close of the transaction, Actavis and Warner Chilcott will be combined under a new company incorporated in Ireland, where Warner Chilcott is currently incorporated. The newly created company, which is expected to be called Actavis plc, or a variant thereof , will be led by the current Actavis leadership team. The transaction is expected to close by year-end 2013.
As per the terms of the Transaction Agreement, at closing Warner Chilcott shareholders will receive 0.160 shares of New Actavis for each Warner Chilcott share they own, which equates to a value of $20.08 per Warner Chilcott share based on Actavis' closing share price of $125.50 on May 17, 2013. This represents a 43 percent premium compared to Warner Chilcott's volume-weighted average trading price of $14.00 for the 30 day trading period ending on May 9, 2013, the day before Warner Chilcott disclosed it was engaged in preliminary discussions with Actavis.
Immediately after the close of the transaction, Warner Chilcott shareholders are expected to own about 23 percent of New Actavis. Shares of New Actavis are expected to trade on the New York Stock Exchange under the ticker symbol ACT.
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