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Allergan Paying $15 Million Penalty for Disclosure Failures During Merger Talks


Washington D.C., Jan. 17, 2017 —

The Securities and Exchange Commission today announced that Allergan Inc. has agreed to admit securities law violations and pay a $15 million penalty for disclosure failures in the wake of a hostile takeover bid.

The SEC’s order finds that Allergan failed to disclose in a timely manner its negotiations with potentially friendlier merger partners in the months following a tender offer from Valeant Pharmaceuticals International and co-bidders in June 2014.  Allergan publicly stated in a disclosure filing that the Valeant bid was inadequate and it was not engaging in negotiations that could result in a merger.  It was required to amend the filing if a material change occurred.  According to the SEC’s order, Allergan never publicly disclosed material negotiations it entered with a different company that would have made it more difficult for Valeant to acquire a larger combined entity.  And after those negotiations failed, the investing public wasn’t informed that Allergan entered into merger talks with Actavis, the company that ultimately acquired Allergan, until the announcement that a merger agreement had been executed.

“Allergan failed to fully and timely disclose information about potential merger transactions it was negotiating behind the scenes in response to the Valeant bid,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.  “As outlined in our order, Allergan was slow to act even after SEC staff reminded the company about its disclosure obligations.”

Allergan, now a wholly owned subsidiary of Allergan plc, admitted the facts in the SEC’s cease-and-desist order finding that the company violated Section 14(d) of the Securities Exchange Act of 1934 and Rule 14d-9. 

The SEC’s investigation was conducted by John Lehmann, Mark Germann, and Charles Riely of the New York office, and the case was supervised by Sanjay Wadhwa.


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