Israel's Teva buys Allergan generic drug unit for USD 40.5 billion

Israel's drugmaker Teva, the largest of its kind in the world, announced Monday that it has signed a deal to acquire the generic unit of Irish pharmaceutical company Allergan for 40.5 billion U.S. dollars.

The deal will see Allergan receiving 33.75 billion dollars in cash, in addition to shares of Teva valued at 6.75 billion dollars, said a statement issued by Teva.

The purchase will vault the Israel-based drug manufacturer into the ranks of the 10 largest pharmaceutical companies in the world.

Allergan, headquartered in Dublin, specializes in developing and manufacturing generic and over-the-counter medicines and healthcare products, including Botox.

Teva, established in 1901, is Israel's largest commercial company. Its headquarters is located in the city of Petach Tikva, west of Tel Aviv. Its net revenues in 2014 amounted to 20.3 billion dollars.

"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," said Erez Vigodman, President and CEO of Teva, in a statement.

He noted that the acquisition comes after Teva's profits in the first six months of 2015 were higher than estimated.

"Since the beginning of 2014, we have significantly strengthened the fundamentals of our company, improved generics profitability, solidified our key franchises and put in place robust engines for organic growth, laying the groundwork for transformative transactions such as this one," he said.

The deal, which means further consolidation of the drug market, also ended Teva's hostile bid to acquire Netherlands-based Mylan, which Teva pursued over the past months. Endit