In yet another major pharmaceutical acquisition, Teva Pharmaceutical Industries (NYSE: TEVA), already the largest generic drug manufacturer in the world, has agreed to acquire Allergan’s (NYSE: AGN) generic drug business for $40.5 billion. If the acquisition were to finalize, Teva would become one of the world’s top 10 pharmaceutical companies. The acquisition is expected to assist Teva in improving their distribution points.
Teva will be acquiring Allergan’s generic drug division with a mix of cash and stock; $33.75 billion in cash and $6.75 billion worth of Teva stock, which is a 10% stake in the company.
The combined company is forecasted to earn revenue of approximately $26 billion and $9.5 billion in earnings with cost and tax savings of $1.4 billion.
Teva’s CEO, Erez Vigodman, comments on the acquisition, “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 specialty capabilities.”
Both Teva and Allergan stock reached new 52-week-highs today with the news.