Teva Pharmaceutical has agreed to acquire Allergan’s global generic pharmaceuticals business for US$40.5 billion.
Allergan will receive US$33.75 billion in cash and US$6.75 billion in Teva stock, representing an estimated under 10% ownership stake in Teva.
“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,” says Erez Vigodman, president and CEO of Teva.
The transaction was unanimously approved by the boards of directors of Teva and Allergan and is expected to close in the first quarter of 2016.
Read: Teva makes unsolicited bid for Mylan
At the same time, Teva withdrew its bid for Mylan.
While Vigodman says a combination of both companies made sense, “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.”
Teva intends to review its options with respect to its ownership of approximately 4.6% of the outstanding ordinary shares of Mylan.
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