Allergan Tips to Valeant in Deal Chain Reaction: Real M&A

Allergan Inc. is running out of ways to avert a takeover by Valeant Pharmaceuticals International Inc.

The $54 billion Botox maker’s defensive options were to acquire smaller drugmaker Salix Pharmaceuticals Ltd. or merge with similar-sized peer Actavis Plc. Now, in what may be Allergan management’s worst-case scenario, Salix and Actavis are in deal talks. It puts Valeant at an advantage, unless Allergan breaks up those talks, finds another target or announces share repurchases or a dividend. Allergan is up against a deadline because shareholders will hold a vote Dec. 18 on whether to remove its board members.