Teva Pharmaceutical Industries made big news in the market Monday after announcing that they have come to an agreement to purchase the generic arm of Allergan. Today, we'll discuss the details of the agreement, what Teva gains from the acquisition, and of course, what we can expect to see moving forward. So, let's get right to it…
The Details Of The Teva/Allergan Deal
In an announcement early Monday morning, Teva announced that it has come to an agreement with Allergan for the purchase of its generic drug unit. The deal is valued at approximately $40.5 billion which will be paid through a cash, stock split. Teva expects that the deal will close in the first quarter of 2016. When the deal closes, Teva will pay $33.75 billion in cash to Allergan as well as provide shares of Teva with a value of $6.75 billion calculated at the opening price of Teva on Monday July 27th, 2015. In a statement following the announcement, Erez Vigodman, CEO of Teva Pharmaceutical Industries had the following to say…
“Our respective portfolios of generic medicines and applications are highly complementary…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 specialty as well as the intersection of the two…”
What Teva Pharmaceutical Industries Gains From The Acquisition
Allergan is a well known company in the biotechnology space; making a name for itself with the popular Botox treatment. Through the acquisition, Teva will gain the rights to all generic medications that Allergan currently owns. They will also gain access to all medications currently in the vast Allergan pipeline; many of which are in late-stage studies at the moment. Given the fact that Teva is currently the world's largest producer of generic medications, this new acquisition will strengthen the company's dominance in the sector as well as assist the company in the advancement of other medications currently being tested.
