Valeant and Actavis held $35bn merger talks Valeant Pharmaceuticals International and generic drugmaker Actavis were recently working on a merger that would have brought together two companies with a combined market capitalisation of $35bn, according to people familiar with matter. But according to one person close to the situation, talks fell apart by Thursday after a dispute over the terms of deal. The parties had been hoping to announce the transaction on Monday, and it is unclear if talks would resume. Both companies declined to comment. The terms of the deal would likely see Valeant acquire Actavis for more than $13bn in a deal pitched as a merger of equals. People said this would likely be done as an all-stock deal, with Valeant paying a slight premium for Actavis shares. But talks were put on hold in recent days. One person familiar with the deal said Actavis directors felt the deal was coming together too fast, and that the price being offered was inadequate. As it as being structured, the deal had a cash shortfall that was not yet resolved, another person said. Industry advisers say Valeant is acquisitive and has considered various targets. The company is also known to consummate deals quickly once it zeros in on a target. Actavis makes generic drugs including one comparable to the popular cholesterol reducer Lipitor, as well as branded drugs for women's health issues. Revenues last year neared $6bn. Valeant, with a market capitalisation of about $22bn, is based in Canada and also makes generic and branded drugs. Earlier this month Valeant and Actavis announced a partnership to release a series of generic drugs, and resolved patent disputes around two others. If the deal is revived, it would mark one of the biggest healthcare transactions of the year. It would also be another multibillion dollar transaction in a year marked by a flurry of megadeals but a dearth of bread and butter transactions. US generic drug company Watson last year bought Swiss rival Actavis for $6bn, taking on the name. Shares in both Valeant and Actavis have performed well recently, riding an upturn in the equity markets. The robust stock prices of both companies was one reason why the boards of both companies thought the deal was possible now, people familiar with the deal said. The Wall Street Journal reported on Friday that Valeant was considering buying Actavis.