Salix Pharmaceuticals Ltd. (SLXP: Quote) and Cosmo Pharmaceuticals S.p.A. announced that they have agreed to terminate their merger agreement pursuant to which Salix would have combined with, and become a wholly-owned subsidiary of, Cosmo Technologies Limited, a subsidiary of Cosmo.
As per the terms of the termination, which is effective immediately, Salix will make a $25 million payment to Cosmo.
Carolyn Logan, President and CEO of Salix said, "When we announced our agreement to merge with Cosmo Technologies in July we believed the combination would generate significant value for our stockholders through the addition of key products to our development pipeline and a more efficient corporate structure that would enhance our profitability. Since then, however, the changed political environment has created more uncertainty regarding the potential benefits we expected to achieve. As a result, Salix and Cosmo have mutually agreed to terminate the proposed transaction. We look forward to a continuation of our long-standing relationship with Cosmo."
Earlier today, Bloomberg reported that Salix Pharmaceuticals is in talks to sell itself to Actavis Plc, after it failed to reach a deal with Botox maker Allergan Inc. The Raleigh, North Carolina-based company is likely to terminate a July agreement to acquire Cosmo Pharmaceuticals SpA.
In July, Salix Pharmaceuticals agreed to merge with Cosmo Technologies, a part of Italy-based Cosmo Pharmaceuticals S.p.A. Upon closure, shareholders of Salix were expected to own slightly less than 80 percent of the shares of Salix Pharmaceuticals plc and Cosmo was expected to own slightly more than 20 percent.