Teva on top with Allergan unit purchase
Hostile bid for Mylan dropped
ISRAELI drugmaker Teva Pharmaceuticals Industries agreed to buy the generic-drug business of Allergan for about $40.5 billion (R510.6bn) in cash and stock, and ended its hostile bid for Mylan.
Teva would pay $33.75bn in cash and $6.75bn worth of shares at yesterday’s price, or about 10 percent of the enlarged company, the Israel-based firm said. Teva surged as much as 12 percent as trade resumed in Tel Aviv. Mylan shares were down 12 percent in US premarket trading.
The deal bolsters Teva’s position as the largest maker of generic drugs, and gives it greater negotiating power with governments and privatehealth insurers. It also allows the drugmaker to extricate itself from an antagonistic pursuit of Mylan, which is trying to buy Perrigo.
“We’re looking at a fairly similar deal to the Mylan offer but without all the uncertainties attached to a hostile situation,” Jonathan Kreizman at Bank of Jerusalem said. “Teva and Allergan have less overlap than Teva and Mylan.”
The acquisition extends a wave of mergers that has swept over the health-care industry. Pharmaceutical deals so far this year have topped $180bn, according to data. That’s on pace to beat last year’s record of more than $200bn.
Allergan, which makes the blockbuster wrinkle treatment Botox, said on Sunday that it would buy the biotech company Naurex, which is developing a fast-acting antidepressant. The $560 million all-cash transaction is expected to close by year-end.
Teva expects its Allergan transaction, which both boards backed unanimously, to close in the first quarter of 2016 and boost earnings per share. Also yesterday, the company raised its earnings per share estimate for 2015 to between $5.15 and