July 27, 2015
After its attempts to woo another firm were rebuffed, generic drug giant Teva has quickly gotten over the sting of rejection and found another company to acquire.
The Philadelphia Business Journal reported Monday that Teva will buy rival Allergan’s generics division for $40.5 billion and give up its pursuit of Mylan, which it had spent months trying to acquire.
The move will allow Allergan, based in Parsippany, New Jersey, to focus more on its brand-name drugs, such as the profitable Botox treatment.
Meanwhile, Teva will continue its dominance as the world’s largest generic drug maker by sales. According to the Wall Street Journal, the Israeli company, which has its North American headquarters in Montgomery County, had $9.1 billion in sales in 2014, or 12 percent of the global market.
In comparison, Allergan is number 3 in the world for generic drug sales, at $6.6 billion annually. Mylan comes in a close fourth at $6.5 billion in sales. Teva is far ahead of both of them, supplying 1 out of every 6 prescriptions filled out in the U.S.
Mylan, which is based in Canonsburg, Pennsylvania but incorporated in the Netherlands for tax reasons, previously rejected Teva’s offer of $40.1 billion for an acquisition.
"Despite our clear commitment to consummating a transaction, and our conviction that we ultimately would have succeeded in acquiring Mylan, we believe we have an even greater opportunity to create compelling, sustainable value for Teva's stockholders through our transaction with Allergan," said Teva CEO Erez Vigodman to the Philadelphia Business Journal.
Teva expects to earn $2.7 billion from the deal before taxes and expenses, in addition to enjoying cost savings of $1.4 billion a year.
The Israeli company is reviewing what it will do with the 4.6 percent of Mylan’s stocks that it owns. Meanwhile, Mylan is in the process of acquiring Irish pharma company Perrigo. So far, however, they have been rebuffed.