AMO has offered to purchase Bausch & Lomb for $75 a share, of which $45 is in cash and $30 in AMO stock.
This compares with a $65 a share offer made by private equity firm Warburg Pincus in May, a takeover agreement that allowed B&L to solicit other bids for 50 days.
AMO said last week that a successful offer would help expand its global market dominance. 'The AMO and B&L businesses complement each other and together would provide increased scale, scope and the enhanced ability to generate productivity and efficiency improvements.
'Through a focus on integrating the best of both businesses, as well as the sale of some non-core assets, our goal is to create a stronger, more competitive combined company with a platform for sustained, profitable growth,' said Jim Mazzo, president and chief executive officer of AMO.
The B&L board of directors said AMO's offer warranted further talks. Warburg Pincus will be entitled to a $40m payment from B&L if the AMO offer is accepted.
The AMO bid comes at a time when both companies have registered heavy losses as a result of product recalls.
In March, B&L recalled more than one millon bottles of ReNu MultiPlus solution after it was found to have excessive iron levels. AMO had to issue a recall notice for its Complete MoisturePlus multipurpose contact lens solution after it was linked by the US Centers for Diseases Control Presentation to a serious outbreak of corneal infections such as Acanthamoeba keratitis.