Biovail, Canada's largest publicly traded pharmaceutical company, and Valeant announced that both companies' Boards of Directors have unanimously approved a definitive merger agreement.

The companies will combine to generate enhanced value for stockholders. The combined company will be called Valeant Pharmaceuticals International, Inc.

"The combination of Biovail and Valeant creates a new leader in specialty pharmaceuticals by combining two highly successful management teams in our industry. Our Board is enthusiastic about the opportunities the combination will bring for shareholders and employees of both companies," said Dr. Douglas J.P. Squires, chairman of the Biovail Board of Directors.

The combined company will have a significantly expanded presence in North America and operations in eight other countries, working across four growth platforms.

The new Valeant will be able to leverage its complementary product lines and operations in specialty Central Nervous System, Dermatology, Canada and emerging markets and branded generics.

"With strong cash flows, substantial synergy opportunities and minimal patent risk, the new Valeant presents the opportunity to create shareholder value at a level that would not have been possible for either company on a stand-alone basis,” said Bill Wells, currently chief executive officer of Biovail and soon to be the non-executive Chairman.

“Moreover, the combined company will preserve the advantageous Biovail corporate structure."

Following completion of the merger, the new Valeant will be headquartered in Mississauga, Ontario and will remain a Canadian domiciled corporation, listed on both the Toronto and New York Stock Exchanges.

Source: Biovail