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Allergan will receive US£33.75bn in cash and a 10% stake in Teva
28/07/2015
Teva buying Allergan Generics for US$40.5bn
Israel’s biggest ever deal
Richard Jansen-Parkes
ISRAEL’S Teva Pharmaceuticals is to pay US$40.5bn for Allergan’s generics business, solidifying its role as the world’s biggest generics maker.
The deal will allow Teva to boost its economies of scale and further expand its international reach. It says that it expects that the deal will begin saving it around US$1.4bn/y within the next three years.
It is thought that the deal is the largest in Israeli history. Allergan owns the world’s third-biggest generics company, so it is likely that Teva will need to sell off some of its products in order to appease antitrust laws and complete the deal.
In return for its generics unit, Allergan will receive US£33.75bn in cash and a 10% stake in Teva, worth around US$6.75bn.
Teva president and CEO Erez Vigodman says that the companies’ “respective portfolios of generic medicines and applications are highly complementary, providing Teva with high quality growth and earnings visibility, and the scale and resources to expand upon our specialty capabilities.”
Alongside its deal with Allergan, Teva has announced that it is dropping its US$40bn hostile bid for Mylan. In a statement, Vigodman says that despite his belief that a deal with Mylan would have been successful, Allergan represents “an even greater opportunity.”
