NEW YORK (The Deal) -- Canadian drugmaker Valeant Pharmaceuticals International (VRX) announced on Monday that it was raising its previous bid for Salix Pharmaceuticals (SLXP) , causing Endo International to drop its competing offer.

On Monday, Laval, Canada-based Valeant sweetened its offer to $173 per share -- or a total enterprise value of $15.8 billion. The new offer adds $1 billion in cash consideration for Salix stockholders, a 43.9% increase over the unaffected price of Salix stock on Jan. 16. As of Monday morning, shares of Salix were trading at $172.66 per share.

Valeant originally penned an agreement to acquire Raleigh, N.C.-based Salix on Feb. 20 for $158 per share, calling for a break up fee of $356 million or about $5.50 per share.

"We continue to be very excited about the combination of our two companies and we are committed to getting this deal done," J. Michael Pearson, Valeant's chairman and CEO, said in a statement.

A joint statement by Salix and Valeant on the amended agreement said the deal is slated to close April 1.

Hours after the Valeant offer, Endo confirmed it was withdrawing its cash and stock proposal to acquire Salix.

Last Wednesday, Endo made a bid that valued Salix's shares at $11.1 billion. The offer included roughly 75% of shares of the acquirer and required the approval of shareholders of both Endo and Salix.

Endo, which is based in Ireland, said in its statement retracting the Salix bid that it would move forward with an active pipeline of acquisition targets within its three core platforms: U.S. branded pharmaceuticals, U.S. generic pharmaceuticals and international pharmaceuticals.

"While we are disappointed with this outcome, we have been and will continue to be disciplined in our approach to potential acquisitions," Endo said in a statement. "We would like to wish Salix and Valeant continued success as they move forward with their transaction." 

In addition to focusing on other deals, Endo will take advantage of existing growth opportunities including its R&D pipeline, according to the statement.

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Last week the Salix-Valeant transaction received clearance under the Hart-Scott-Rodino Antitrust rules for its proposed merger.

Valeant recently increased an offering of senior unsecured notes to fund the Salix acquisition to $10.1 billion from $9.6 billion. The notes offering is expected to close on or around March 27. Barclays and Deutsche Bank are among the nine bookrunners on the deal.

At the time of the original offer, the companies noted that the purchase is expected to create more than $500 million in annual cost savings, generating synergies within six months of closing. The acquisition adds 22 gastrointestinal products to Valeant's slate of products.

The Salix deal is Valeant's biggest since it tried to purchase Botox maker Allergan (AGN) - Get Allergan plc Report last year, a hostile takeover offer that was backed by William Ackman's activist fund Pershing Square Capital Management. After months of sparring between the companies, Allergan ultimately agreed to sell itself for $66 billion to Actavis (ACT) - Get AdvisorShares Vice ETF Report in November.

While pursuing Salix, Valeant was also the stalking horse bidder -- and winner -- for the rights to prostate cancer drug Provenge from bankrupt Dendreon Corp., a transaction that was valued at more than $400 million.

So far, 2015 has been an active year for M&A in the pharmaceutical sector. Last week Concordia Healthcare Corp. announced that it would acquire PE-backed Covis Pharma for $1.2 billion in cash. In January, Shire (SHPG) - Get Shire PLC Sponsored ADR Report agreed to purchase Bedminster, N.J.-based NPS Pharmaceuticals (NPSP) for $5.2 billion, while Pfizer (PFE) - Get Pfizer Inc. Report purchased Hospira (HSP) in a bid to penetrate the growing and attractive biosimilars market, for almost $17 billion.

Valeant retained Deutsche Bank's Jason Haas, Michael Cohen and Bill Frauenas well as a team at HSBC as its financial advisers. A team at Sullivan & Cromwell including Alison Ressler, Sarah P. Payne, Nader Mousavi, Matthew Friestedt, Dennis Sullivan, S. Neal McKnight, special counsel Stephen J. Elliott, Spencer Simon, Xiaodong Yi, David Passey, and associates Nicholas Snow, Helen Lu, Nathan Rahmanou, Tyler Rosenbaum, Craig Orbelian, Katherine Scherschel, Alice Lee, Louis Argentieri, Rachel Yu, Regina Readling, Douglas A. Sarro, Ari Blaut and Mushfique Shams Billah provided legal advice to the buyer, along with Valeant's in-house general counsel Rob-Chai-onn.

Salix Pharmaceuticals retained Centerview Partners' Alan Hartman, Robert Pruzan, Ercument Tokat and Reece Kresser and J.P Morgan Securities' Steve Frank, Tom Monaghan and Jeremy Meilman as its financial advisers. Salix retained a legal team at Cadwalader, Wickersham & Taft including Christopher Cox, Gregory Patti, Jr., William Mills, Ira Schacter, Charles "Rick" Rule, Andrew Forman, Linda Swartz, Dorothy Auth, Jeff Nagle, special counsel Andrew Alin, Edward Wei, and associates Anita Wong and Alexandra Cotter. Centerview retained Wilkie Farr & Gallagher's Steven Seidman, Laura Delanoy and associate Laura Acker as its legal counsel. J.P. Morgan worked with Andrew Bab at Debevoise & Plimpton.

Endo retained Bank of America Merrill Lynch and Credit Suisse Securities as its financial advisers. The company retained Skadden, Arps, Slate, Meagher & Flom as legal counsel.

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