Activist investor William Ackman of Pershing Square Capital and Valeant Pharmaceuticals International are teaming up to pursue a takeover of Allergan. Allergan shares rose 13 percent on the news.
Valeant, in a filing with the Securities and Exchange Commission, said it expected to offer a mix of stock and about $15 billion in cash for the Botox maker.
Barclays and RBC are lined up to finance the cash portion. Sources told CNBC the deal's total value would be slightly more than $45 billion.
Allergan declined to comment. Click here to see what Allergan's shares are doing now.
Dow Jones first reported the news Monday afternoon.
Pershing Square, which declined to comment, holds a nearly 10 percent stake in Allergan. The pharma company is best-known for its cosmetology blockbuster Botox.
The SEC filing indicated that Ackman and Valeant agreed in late February to pursue Allergan. Ackman also agreed to hold at least $1.5 billion worth of Valeant shares for one year after the closing of an Allergan merger.