The deal, while not yet approved by each company's board, is expected to be announced before the open of trading tomorrow, barring a last minute setback. An exact price and specific composition of the deal's stock and cash components was not shared by sources.
Allergan's decision to sell to Actavis comes after a long battle to avoid the clutches of Valeant, which teamed with the hedge fund Pershing Square in making an unsolicited bid for Allergan last spring.
Actavis has been acquiring companies at a breakneck pace. The Allergan deal, which will represent it's biggest purchase yet by far, follows closely on the heels of its acquisition of Forest Labs.
Valeant, which has not been contacted by Allergan, is likely to abandon its bid for the company in the face of the Actavis deal, according to people close to that company.
The Actavis deal will include a "typical" break fee, according to people close to the situation, but that fee could still represent as much as a $2 billion ticket that would need to be paid by Valeant, were it to try and outbid Actavis.