Canadian drugmaker Valeant Pharmaceuticals International Inc. has agreed to buy Salix Pharmaceuticals Ltd. for about $10 billion in cash.
The companies said Sunday that their boards of directors approved the transaction, which amounts to about $158 for each of Salix's outstanding shares.
That's just above Raleigh, North Carolina-based Salix's closing price of $157.85 per share on Friday.
With debt, the deal is valued at $14.5 billion.
The deal is a win for Valeant, which made several offers to buy Allergan last year, but was repeatedly rebuffed by the Botox-maker. Allergan agreed to be acquired by Ireland-based Actavis in November.
In 2013, Valeant acquired contact lens-maker Bausch + Lomb for $8.7 billion.
In a statement, Valeant said the Salix acquisition will create a new, strong platform for growth, noting the company's focus on developing drugs to treat gastrointestinal diseases.
"The growing (gastrointestinal) market has attractive fundamentals, and Salix has a portfolio of terrific products that are outpacing the market in terms of volume growth and a promising near-term pipeline of innovative products," said J. Michael Pearson, Valeant's chairman and chief executive officer.
Valeant expects to reap more than $500 million in annual cost savings for the combined company.
The company also said it has no plans to reduce Salix's specialty sales forces or hospital, key account and field reimbursement staff. It noted that it hasn't determined how many of Salix's primary-care sales staff will remain.
Valeant will finance the all-cash takeover bid with a combination of bank debt and bonds.
The company expects that the transaction will contribute modestly to Valeant's 2015 cash earnings per share. It projects a 20 percent boost in 2016, however.
Still, Valeant also anticipates that revenue this year will be down about $500 million because of the impact of excess levels of wholesale inventory.
The deal is expected to close in the second quarter.
Valeant, which is based in Laval, Canada, has scheduled a conference call with financial analysts early Monday to discuss the Salix acquisition.
Also on Sunday, Valeant reported that its earnings increased more than fourfold in the last three months of 2014 versus the same period a year earlier. The latest results included a one-time gain of $287 million.
All told, the company's net income rose to $534.9 million, or $1.56 per share, compared with net income of $123.8 million, or 36 cents per share, a year earlier. Revenue jumped 10 percent to $2.3 billion.