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Tax Benefits, Branded Portfolio, Synergies Drive Actavis’ Acquisition of Warner Chilcott

Actavis’ purchase of Warner Chilcott will lower the former’s overall tax rate significantly, expand its specialty pharma business to 25% of total revenues, and provide global critical mass – all necessary responses to a future that includes fewer opportunities for small molecule generics and greater pricing pressures.

Many of the reviews are in and they are positive. Wall Street pretty much uniformly likes the planned acquisition of Warner Chilcott PLC announced by Allergan PLC on May 20, with the stock up since rumors of the deal surfaced in mid-April by roughly a third, to close at $128 as of May 23.

Actavis will relocate its corporate headquarters from New Jersey to Ireland, where Warner Chilcott is officially based, enabling the buyer to shrink its overall tax rate by about 10% (from 27% to 17%) -- a step that numerous specialty pharma companies have undertaken in recent years ([A#14130520003])

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