Valeant CEO: Merger of equals still on the table

Valeant Pharmaceuticals ($VRX) is still shopping. Fresh off closing its $8.7 billion Bausch & Lomb buyout, the Canadian drugmaker expects more acquisitions as 2013 wears on. And why not? So far this year, the company's sales are up 40%, thanks to several good-sized deals.

Valeant CEO J. Michael Pearson

Plus, CEO J. Michael Pearson says Valeant is still talking about a "merger of equals." Its reported foray toward generics maker Actavis ($ACT)--which, at $13 billion, would certainly have qualified--hit a snag on deal terms earlier this year. Whether that's the business combo Pearson refers to isn't clear. He would only say that wrapping up a merger of equals "can't be predicted," Reuters reports.

If Valeant's recent transactions are any indication, whatever companies are in Valeant's sights would have to brace themselves for postmerger cuts. Pearson told Bausch + Lomb employees late last month to expect job cuts in the range of 10% to 15% of the combined company's workforce, or up to 2,700 jobs. Some 200 Bausch & Lomb employees got their pink slips yesterday, as soon as the deal closed. That's no big surprise, given Valeant's record; the company slashed the payroll at newly acquired Medicis as soon as that deal closed.

And big relocations are on the way, too. Valeant is combining far-flung facilities into a couple of centralized sites--and, much to the chagrin of New York state officials, Bausch + Lomb's Rochester, NY, headquarters will move to New Jersey in the process. Its manufacturing operations will stay, however.

Valeant now says it expects to save "significantly more" than the $800 million in "synergies" originally projected with the Bausch + Lomb merger.

How is Valeant doing internally? Organic sales growth in established markets was negative, thanks to generic versions of the Zovirax antiviral ointment; Valeant takes care to point out that, without that generic competition, sales would have grown by 5%. In emerging markets, the numbers were better: growth of 14%, excluding acquisitions. Overall? Pearson credits the company's "diversified portfolio" for its "continued outperformance." 

- get the Valeant announcement
- see the Reuters news

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