Teva announces Allergan Generics acquisition, drops Mylan bid

JERUSALEM — In a move that will reshape the generic pharmaceuticals landscape, Teva announced Monday that it would be acquiring Allergan Generics. The transaction is valued at $40.5 billion, a combination of $3.75 billion cash and about $6.75 billion in Teva shares.

“This transaction delivers on Teva’s strategic objectives in both generics and specialty,” Teva President and CEO Erez Vigodman said. “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.”

The acquisition is projected to bring the combined company about $26 billion in pro forma sales and $9.5 billion in earning before interest, taxes, depreciation and amortization. The transaction is expected to be completed in the first quarter of 2016.

On the heels of announcing the Allergan acquisition, Teva also withdrew its $40 billion bid to purchase Mylan. Monday’s withdrawal also comes after Friday’s news that an independent foundation, Stichting Preferred Shares Mylan, exercised its full call option on $488,388,431 preferred shares in Mylan.

“We continue to believe that a combination of Teva and Mylan would have made sense for our companies, our respective stockholders and the healthcare industry as a whole,” Vigodman said. “However, despite our clear commitment to consummating a transaction, and our conviction that we ultimately would have succeeded in acquiring Mylan, we believe we have an even greater opportunity to create compelling, sustainable value for Teva’s stockholders through our transaction with Allergan — and we acted quickly to seize the opportunity.”