In a mega deal in the global pharmaceuticals sector, Israeli drug maker major Teva will acquire Allergan Generics for USD 40.5 billion in a cash and stock transaction.
The company also announced it has withdrawn its USD 40 billion cash and stock proposal to acquire Mylan made in April this year following its decision to acquire Allergan Generics from Irish firm Allergan Plc, the maker of world-renowned brand Botox.
"Upon closing, Allergan will receive USD 33.75 billion in cash and shares of Teva valued today at USD 6.75 billion, representing an estimated under 10 per cent ownership stake in Teva...," the company said in a statement.
The transaction was unanimously approved by the Board of Directors of Teva and Allergan and is expected to close in the first quarter of 2016, it added.
In a separate statement, Allergan said under the pact, Teva will acquire Allergan's legacy Actavis global generics business, including the US and international generic commercial units, third-party supplier Medis, global generic manufacturing operations, the global generic R&D unit, the international over-the-counter (OTC) commercial unit (excluding OTC eye care products) and some established international brands.
Teva President and CEO Erez Vigodman said: "This transaction delivers on Teva's strategic objectives in both generics and specialty.
"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."
Following the completion of the acquisition, Teva is expected "to have pro forma sales of approximately USD 26 billion and EBITDA of approximately USD 9.5 billion in 2016, including an estimated USD 11 billion in sales outside of the US," the company said, adding "Teva will be a top 10 global pharmaceutical company".
Teva further said it expects to achieve cost synergies and tax savings of approximately USD 1.4 billion annually, largely achievable by the third anniversary of the closing of the transaction.
Together, Teva and Allergan Generics will have a commercial presence across 100 markets, including a top three leadership position in over 40 markets.
Allergan CEO and President Brent Saunders said the "transaction will accelerate Allergan's evolution into a branded Growth Pharma leader, enable a sharpened focus on expanding and enhancing our global branded pharmaceutical business and strengthen our financial position to build on our proven track-record of value creation led by effective capital deployment.
