A proposed merger of Valeant Pharmaceuticals International and Actavis was put on hold after the two drugmakers failed to agree on terms of a deal that would have created a healthcare giant with a combined market value of $35 billion, a person familiar with the situation told Reuters on Saturday.

Actavis spokesman David Belian and Valeant spokeswoman Laurie Little both declined to comment.

Canada's Valeant was seeking to buy smaller U.S. rival Actavis for more than $13 billion before the discussions started to unravel late this week because of disagreements on the proposed terms, the source said. It was not clear on Saturday if the merger could be revived.

Valeant, which has a market capitalization of about $22.2 billion, said in February it was in talks to make more acquisitions, and it remains open to discuss a potential "merger of equals," even as it aims to lower its $10.8 billion debt.

The Montreal-based company has aggressively built up its dermatology and aesthetics portfolio in the United States in the past year, acquiring about a dozen assets or smaller companies, most recently winning a short bidding war for Obagi Medical Products.

Actavis, the third-largest global generic drugmaker, is itself the product of a merger. The company changed its name in January from Watson after buying Actavis as part of its strategy to expand in international markets and offer more specialty drugs.

Valeant, which was formerly known as Biovail before it acquired Valeant and assumed its name, is scheduled to report first-quarter results on Thursday.