The combined entity, called Valeant Pharmaceuticals International, will have a significantly expanded presence in North America and operations across eight other countries.
The deal is expected to take advantage of tax breaks and other savings and the new entity will be run by Valeant’s existing CEO Michael Pearson. Biovail CEO Bill Wells will be non-executive chairman.
Shareholders of Biovail will own 50.5% of the new firm, while Valeant shareholders will own 49.5%.
The new Valeant will be able to leverage its complementary product lines and operations in specialty central nervous system and dermatology.
The transaction will create a firm with cash flow of $900m which will tap the neurological drugs market for ailments that affect aging population like Alzheimer’s and Parkinson’s.