• Bausch & Lomb has agreed to sell itself to Valeant Pharmaceuticals International of Canada for $8.7 billion in cash.

    Under the terms of the deal, Valeant will pay $4.5 billion to the investor group that owns Bausch & Lomb, led by the private equity firm Warburg Pincus. Valeant will also spend about $4.2 billion to repay Bausch & Lomb's outstanding debt. The transaction is expected to close in the third quarter, pending regulatory approval.

    This is the biggest acquisition for Valeant, based in Laval, Quebec, more than three times the value of its $2.6 billion purchase of the skin care company Medicis Pharmaceutical last year.

    Bausch & Lomb will retain its name and become a division of Valeant. Valeant's existing ophthalmology businesses will be integrated into the Bausch & Lomb division, creating a global eye health business with estimated 2013 net revenue of more than $3.5 billion.

    "We are excited to announce the acquisition of Bausch & Lomb, which will transform Valeant into a global leader in eye health by significantly strengthening our capabilities in ophthalmic pharmaceuticals, contact lenses and lens care products, and ophthalmic surgical devices and instruments. Bausch & Lomb's world-renowned brand, comprehensive portfolio of leading eye care products, and promising late stage pipeline are an ideal strategic fit for our current ophthalmology business, and we are strongly committed to continuing to build a sustainable eye health business," said J. Michael Pearson, Valeant's chairman and chief executive officer.

    Warburg Pincus began exploring a sale or initial public offering for Bausch & Lomb late last year and held preliminary talks with a number of potential bidders. Among them was Valeant, though Mr. Pearson said that at the time he and his board could not justify paying the more than the $10 billion that Warburg Pincus was seeking. Instead, Bausch & Lomb filed in March for an initial public offering.

    Until last month, Valeant was pursuing a takeover of a different company, the generic drug maker Actavis, in what would have been a deal worth over $13 billion. When those talks collapsed, Valeant then turned to Bausch & Lomb.