Companies expect $500m in savings through ‘R&D rationalisation’

Serial acquirer Valeant has agreed to buy gastroenterology specialist Salix Pharmaceuticals for $14.5 billion (£9.4 billion). The deal conforms to Valeant’s established record of taking over firms with a view to aggressively cutting costs – particularly in R&D.

Valeant expects to be able to make $500 million in annual savings across the merged company through reducing corporate overheads and ‘R&D rationalisation’. However, the company notes that ‘there are no planned reductions to Salix’s highly rated specialty sales forces’.

The deal comes in the wake of Valeant’s failed hostile takeover bid for botox-maker Allergan, which was foiled by a bid from Actavis