The deal which was valued at $45.7 billion in cash and stocks was rejected by Valeant citing significant risks and uncertainties for investors. Allergan has been very upbeat about its future prospects expecting double-digit revenue growth and a 20 percent to 25 percent rise in share value.
Allergan Chief Executive David Pyott said the Valeant offer "does not reflect the value of the company's leading market positions."
"After thorough consideration, it is the unanimous view of the Allergan board that your unsolicited proposal substantially undervalues Allergan, creates significant risks and uncertainties for the stockholders of Allergan, and is not in the best interests of the company and its stockholders," Pyott said in a letter to the Allergan board.
Allergan co-founder Gavin Herbert had said earlier this month that he was worried that a Valeant takeover would mean cutting their R&D budget by as much as 80 percent. That would have severely affected the company's ability to produce new drugs.