Actavis to Buy Forest Labs for $25 billion

Dublin, Ireland-based generic drugmaker Actavis is acquiring specialty pharmaceuticals company Forest Laboratories of New York in a cash and stock deal valued at about $25 billion.

The deal is being described as the biggest ever for Activis, known until 2012 as Watson Pharamaceuticals. Reports said it will change the company's mix of sales, result in more than $1 billion in cost savings and extend sales of Forest's brand-name products to more markets.

Forest, whose biggest competitors include Teva and Mylan, in January of this year acquired privately held gastrointestinal and cystifibrosis drugmaker Aptalis for $2.9 billion. Forest itself produces an Alzheimer's treatment marketed as Namenda as well as the hypertension treatment Bystolic.

In recent past years, Actavis has bought up several specialty drug makers to boost profit margins and sales. In 2012 it acquired Zug, Switzerland-based Actavis and took the company's name.

Ireland's Warner Chilcott, added in 2013 for $9.2 billion including net debt, enabled the drug maker to expand in women's health and urology and also gained it the Irish domicile that lowered its tax rate. 

Billionaire U.S. investor Carl Icahn reportedly was the deal broker for the latest Actavis transaction. The activist shareholder has a track record of investing in drugmakers and profiting from their turnarounds or sales to larger companies.

News agencies quoted Icahn as calling the Forest sale "one of the best pharma mergers in the last decade."