July 25, 2015 / 12:14 AM / 4 years ago

UPDATE 2-Allergan said to be exploring split into two businesses -source

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By Greg Roumeliotis

July 24 (Reuters) - Allergan Plc is considering a breakup of the company into two businesses, a person familiar with the matter told Reuters on Friday, potentially adding the botox-maker to a list of large drugmakers realigning themselves to focus on specific areas of their businesses.

Allergan is considering keeping its branded drugs business but spinning off or selling parts or all of its generics business, according to the person who asked not to be identified because the deliberations are confidential.

Just eight months ago the Botox-maker formed a multibillion dollar pharmaceutical company through a merger with Actavis Plc.

Large drug makers are trying to realign their business to focus on a small number of leading businesses while smaller specialty and generic producers are seeking larger scale.

Last year, Abbott Laboratories sold its specialty and branded generics business in developed markets to Mylan Inc for $5.3 billion while Bayer acquired Merck’s consumer care business for $14.2 billion.

GlaxoSmithKline Plc and Novartis said they had completed a series of asset swaps worth more than $20 billion that will reshape both companies.

Novartis also sold its animal health unit to Eli Lilly for $5.4 billion in 2014.

Allergan’s shares were up 4.7 percent in extended trading after closing at $308.21 on Friday.

Allergan’s branded drugs business makes products such as Botox and Alzheimer’s drug Namenda, while its generics business makes up about a third of the company’s total revenue.

The news was first reported by Bloomberg, which said that the discussions were still taking place and there was no certainty that a spin-off or breakup would occur.

Representatives for Allergan could not be reached immediately for comment.

Actavis outbid Canadian drugmaker Valeant Pharmaceuticals International Inc and activist investor William Ackman in November to form a $121 billion pharmaceutical company with Allergan. (Additional reporting by Amrutha Penumudi in Bengaluru; Editing by Ken Wills)

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