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The dealmakers at Actavis and Allergan have been busy over the weekend. Reporters for the Wall Street Journal and the Financial Times almost simultaneously reported Sunday afternoon that the two companies were getting close to a friendly acquisition deal, which the FT cited as a $64 billion deal in the making.
The deal hasn't been closed yet, but both news organizations say that an agreement could be finalized and announced by tomorrow. The FT reports that Actavis ($ACT) has offered to pay about $215 a share for Allergan ($AGN).
If the reports prove accurate--and there's clearly something going on here--then Actavis CEO Brent Saunders will be close to achieving his goal of creating a new Big Pharma operation with a significant portfolio of branded and generic therapeutics on the market as well as a pipeline of new products in development. Saunders emerged as CEO of the company after helping engineer a merger between Forest Labs and Actavis, which had originally been devoted to generics and enjoys a low-tax domicile in Ireland.
Today's reports follow a hot collection of stories from late last week that Actavis was getting closer to an agreement.
If the deal goes through, Allergan CEO David Pyott will have achieved his aim: eluding the clutches of Valeant ($VRX) and its ally, William Ackman. The partners have offered $53 billion for Allergan, the maker of Botox, and said they might come up with more. Pyott and his board, though, have consistently maintained that the Valeant proposition undervalued Allergan and would inevitably be paid for by gutting an R&D operation that now consumes about $1 billion a year.
A combination of Allergan and Actavis would create a company with $23 billion in annual sales, notes the WSJ. That would put it quite close to the top 10 pharma companies on the planet. According to a report from FiercePharma, Eli Lilly was ranked number 10 in total revenue, with $23 billion for 2013. Lilly's revenue has been in free fall this year, though, as generic competition has pummeled its biggest drug franchises.