Israeli pharmaceutical firm Teva is to buy Allergan's generics drugs business for US$40.5bn, in a move in which Teva will become one of the top 10 pharmaceutical companies.
Teva will pay $33.75bn in cash and shares valued at $6.75bn, representing a 10% ownership stake in Teva.
Allergan will keep its global branded pharmaceutical and medical aesthetic businesses, as well as its biosimilars development programmes.
According to Teva, this acquisition brings together two leading generics businesses with complementary strengths, brands and cultures, providing patients with more affordable access to quality medicines, and creating significant financial benefits for shareholders.
Erez Vigodman, President and CEO of Teva, said: 'Through our acquisition of Allergan Generics, we will establish a strong foundation for long-term, sustainable growth, anchored by leading generics capabilities and a world-class late-stage pipeline that will accelerate our ability to build an exceptional portfolio of products – both in generics and speciality.'
We will establish a strong foundation for long-term, sustainable growth
Vigodman said the combined companies will have pro forma revenue of approximately $26bn and combined EBITDA of approximately $9.5bn in 2016, this acquisition reinforces our strategy, accelerates growth and diversifies revenues both by product and geographically, supporting its new business model.
'Our 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 speciality capabilities,' he added.
Teva also said it expects to achieve cost synergies and tax savings of around $1.4bn a year, largely achievable by the third anniversary of the closing of the transaction, as well as savings from further operational efficiencies in manufacturing and sales and marketing.
The transaction was unanimously approved by the Boards of Directors of Teva and Allergan and is expected to close in the first quarter of 2016.
Teva will now walk away from its $40bn takeover bid for Mylan.