Valeant Pharmaceuticals International of Aliso Viejo and Canada’s Biovail Corp. said Monday their shareholders approved Biovail’s $3.2 billion buy of Valeant.
The vote came after Biovail’s founder and a pair of California state lawmakers raised objections to the deal.
The companies said shareholders approved the deal, which is set to be effective Tuesday.
The combined drug maker retains the Valeant name and Chief Executive J. Michael Pearson, but will be based in Canada to take advantage of tax breaks and other savings.
Valeant has said that it plans to cut 1,100 jobs, or about 25% of the combined company’s total of 4,400, in order to cut costs.
Eugene Melnyk, Biovail’s founder, told the Canadian Broadcasting Co. that the Biovail-Valeant deal is “doomed to fail” under a huge debt load.
Melnyk said he was concerned about how much debt was required to complete the deal.
Published reports said that the terms included a loan of $950 million to $1 billion due in 2015 and another loan totaling $625 million to $675 million. Valeant also wants a $175 million revolving credit line.
“It is doomed to fail in two or three years. They won’t be able to pay back the debt,” Melnyk said.
On Friday, two California assemblymen, Kevin de Leon and Jared Huffman, asked regulators to take a second look at the Biovail-Valeant deal, citing concerns about job and tax revenue losses.
Valeant isn’t based in either of the Democratic lawmakers’ districts.
