Allergan & Teva – Two sides of one table

Deals

Allergan (former Actavis) is restructuring its operations with the divestment of its generics business to Teva for approximately USD 41 billion in cash and stock ($33.75 billion in cash and Teva shares valued at $6.75 billion, giving it a 10% stake in Teva).

But it’s not done. According to an interview with the Financial Times, the CEO, Brent Saunders, is eager to sign another mega deal with the proceeds from the sale mentioned above. Allergan can then be put on the list of serial deal makers.

On the other side of the table, Teva is about to join the club of the biggest pharmaceutical companies. According to a Business Insider UK article, “Allergan’s generic business is generally seen as a better fit than Teva’s previous target Mylan because it will improve Teva’s distribution channels and because Allergan is strong in so-called biosimilar drugs.”

In the generics market, Teva will stay one step ahead of Novartis Sandoz division (estimated proforma 2014 sales of USD 15.7 billion for Teva-Allergan vs. USD 8.5 billion for Novartis Sandoz division).

In this context, Teva will probably drop its pursuit of rival Mylan, which in turn will be able to focus on buying Perrigo.

Additional links:

Allergan signals appetite for new mega deal after $41bn disposal – Financial Times (Subscription required)

A $40.5 billion deal with Allergan will make Teva one of the biggest drug companies on the planet – Business Insider

Teva to Buy Allergan Generics for $40.5 Billion – WSJ

The Last-Minute Phone Call That Spurred Teva-Allergan Deal – Bloomberg

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