UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2015
Commission File Number: 001-16174
Teva
Pharmaceutical Industries Ltd.
(Translation of registrants name into English)
Israel
(Jurisdiction of
incorporation or organization)
5 Basel Street
P.O. Box 3190
Petach
Tikva
4951033 Israel
(Address of principal executive office)
Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) : ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7) : ¨
Indicate by check mark whether the registrant by furnishing the information
contained in the Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934. Yes ¨ No x
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Date: April 21, 2015
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TEVA PHARMACEUTICAL INDUSTRIES LTD., |
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By: |
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/s/ Eyal Desheh |
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Name: |
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Eyal Desheh |
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Title: |
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Group EVP & CFO |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Teva Proposes to Acquire Mylan for $82.00 Per Share in Cash and Stock. |
Exhibit 99.1
TEVA PROPOSES TO ACQUIRE MYLAN FOR $82.00 PER SHARE IN CASH AND STOCK
Combination to Create an Industry-Leading Company, Well Positioned to Transform the Global Generics Space and Create a Unique and
Differentiated Business Model,
Leveraging on Its Significant Assets and Capabilities in Generics and Specialty
Very Attractive Strategic and Financial Benefits for Teva and Mylan Stockholders
Tevas Proposal Provides Significant Premium and Immediate Value for Mylan Stockholders and Opportunity to Participate in Upside
Potential of Combined Company
More Attractive Alternative for Mylan Stockholders
Than Mylans Proposed Acquisition of Perrigo
Enhanced Financial Profile, Creating Opportunity for Rapid Deleveraging,
Funding of Future Growth and Increased Investment in Key Specialty Therapeutic Areas
Strongly Positioned to Drive Sustainable Top- and Bottom-Line Growth, Immediately and Over Long-Term
Opportunities for Substantial, Achievable Cost Synergies and
Tax Savings, Estimated at $2 Billion Annually
Expected to be Significantly Accretive to Teva non-GAAP EPS,
Starting in the Mid-Teens in Year 1 and Approaching 30% by Year 3
JERUSALEM Apr. 21, 2015 Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today announced a proposal to acquire all of the
outstanding shares of Mylan N.V. (NASDAQ: MYL) in a transaction valued at $82.00 per Mylan share, with the consideration to be comprised of approximately 50 percent cash and 50 percent stock. The Teva cash and stock proposal provides Mylan
stockholders with a substantial premium and immediate cash value, as well as significant potential for future value creation through participation in a financially and commercially stronger company.
Tevas proposal also provides Mylan stockholders with a more attractive alternative to Mylans proposed acquisition of Perrigo Company plc (NYSE and
TASE: PRGO), as announced on April 8, 2015, as well as to Mylan on a standalone basis. Tevas proposal would provide Mylan stockholders with consideration representing a 37.7% premium to the stock price of Mylan on April 7, 2015,
which is the last day of trading prior to Mylans press release regarding its unsolicited proposal for Perrigo, and a 48.3% premium to the unaffected stock price of Mylan on March 10, 2015, which is the last day of trading prior to
widespread speculation of a transaction between Teva and Mylan.
The proposed combination of Teva and Mylan would create a leading company in the
pharmaceutical industry, well positioned to transform the global generics space. The combined company would leverage its significantly more efficient and advanced infrastructure, with enhanced scale, production network, end-to-end product portfolio,
commercialization capabilities and geographic reach. With this platform, the combined company would focus on complex technologies and more durable and sustainable products, in combination with robust capabilities in specialty drug development and
commercialization. As a result, the combined company would have a unique and differentiated business model addressing significant trends and discontinuities prevailing today among patients and healthcare systems around the world. The combined
company would also have an enhanced financial profile, creating the opportunity for rapid deleveraging and the funding of future growth in generics, specialty and the intersection of the two.
Our proposal is compelling for both Teva and Mylan stockholders and other stakeholders, said Erez Vigodman, President and CEO of Teva. Our
proposal would provide Teva stockholders with very attractive strategic and financial benefits and Mylan stockholders with a substantial premium and
immediate value for their shares, as well as the opportunity to participate in the significant upside potential of the combined company one that would transform the global generics space
and leverage it to hold a unique leadership position in the pharmaceutical industry. We have long respected Mylans business, and we are confident that Mylans Board of Directors and stockholders will agree that our proposal represents a
significantly more attractive alternative for Mylan and its stockholders than Mylans proposed acquisition of Perrigo.
We are very
satisfied with the progress Teva has made over the last year, solidifying the foundation of our company, protecting its main specialty franchises and building our engines for organic growth. We have deep conviction in the future of Teva, building on
our people, pipeline and capabilities in generics and specialty. The combination of Teva and Mylan is a truly unique opportunity to build upon both companies solid foundations. Bringing the two together will create a much stronger, more
efficient platform to achieve our goals. As one company, we would have the infrastructure and capabilities to faster pursue a differentiated business model, fully integrating specialty and generics drugs with products, devices, services and
technologies to meet the evolving needs of patients and customers.
Mr. Vigodman continued, Furthermore, this proposed transaction
advances the best interests of all other stakeholders of Mylan. The combined company will continue to advance Mylans vision of setting new standards in healthcare, and will enhance opportunities to provide the world population with access to
the broadest range of affordable, high quality medicine. Importantly, employees would benefit from substantial opportunities for growth and development as part of a larger leading company. We look forward to a bright future for our employees and
enhanced choice for our customers.
Mr. Vigodman concluded, Our companies share years of experience and success leading the generic
industry and building strong presences in specialty and biologics. Both Teva and Mylan have achieved their respective goals through innovation, vision and a commitment to quality. Mylans business is a natural fit with our own and is highly
complementary to it and bringing together our two companies would not only deliver the greatest value for our financial stakeholders, but also enable us to better serve patients, customers and healthcare systems throughout the world. We are
confident that any regulatory requirements necessary to complete a combination with Mylan will be met in a timely manner, enabling us to realize compelling value for stockholders of both Teva and Mylan.
Prof. Yitzhak Peterburg, Chairman of the Teva Board of Directors, said, The proposal to acquire Mylan was unanimously approved and strongly supported by
the Teva Board. Tevas strategy has been to aggressively pursue growth opportunities that advance our goal of being a stronger, more diversified organization with the scale and resources to drive value across our business. Our proposed
combination advances these objectives and would result in significant and sustained value creation for Teva stockholders.
Teva and Mylan
Together: Compelling Strategic Rationale
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Creates an Industry-Leading Company Well-Positioned to Transform the Generics Space: The transaction would create a company with a significantly expanded and more efficient global footprint, including leadership
positions and strengthened operations, sales and R&D platforms in attractive markets around the world. The combined company would benefit from a robust, industry-leading sales infrastructure and deep customer and provider relationships across
the expanded network. The result is an even more efficient, flexible and competitive global platform with industry-leading go-to-market capabilities. |
The Teva and Mylan product offerings are highly complementary, and together, would create the broadest portfolio in the industry, with a
combined pipeline of over 400 pending ANDAs and over 80 first-to-files in the U.S.
Furthermore, the combined company will possess the
capabilities and technologies to focus on more complex, hard-to-produce durable products, delivering better value and accessibility, while improving adherence and compliance. Tevas capabilities in this field will significantly expand with the
addition of Mylans ophthalmic products, soft gel caps, topical and inhalant technologies, Wave 2 biosimilars, injectables and alternative dosage forms, and Antiretroviral (ARV) products.
The combined company would also benefit from the most advanced R&D capabilities in the
generics industry and the worlds leading integrated API division.
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Creates a Unique and Differentiated Business Model, Leveraging Significant Assets and Capabilities in Generics and Specialty and the Intersection of the Two: Teva is committed to investing in and growing the
combined companys $10 billion specialty pharmaceuticals business, which it expects will grow stronger, based on combining the separate companies standalone offerings. The combined company would benefit from leading positions in multiple
sclerosis, respiratory, pain, migraine, movement disorders and allergy therapeutics, combined with an enhanced global infrastructure to pursue current and future commercialization. |
Furthermore, the combined companys significantly enhanced financial position and resources would enable it to further invest in its
specialty R&D programs and aggressively pursue business development opportunities generating short- and longer-term growth.
Significant
Financial Benefits of a Combined Teva and Mylan
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Strong Financial Profile to Drive Future Growth: The combined company would have an enhanced financial profile, creating the opportunity for the funding of future growth. The combined Teva and Mylan would have
pro forma 2014 revenues of approximately $30 billion and pro forma 2014 EBITDA of approximately $9 billion. |
The combined
company would have a strong long-term growth profile that includes mid-single digit top-line growth, as well as significant non-GAAP EPS growth. In 2016, the combined company is expected to have cash flow from operations, excluding one-time
restructuring costs, of greater than $6 billion, revenues of greater than $30 billion and EBITDA of greater than $10 billion. In 2018, the combined company is expected to have cash flow from operations of greater than $8.5 billion, revenues of
approximately $33 billion and EBITDA of approximately $13 billion.
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Maintains Financial Strength and Flexibility: The combined company is expected to have substantial debt capacity and an investment grade rating. Furthermore, the combined companys strong cash flow
generation will allow deleveraging to at or below 3.0x gross debt to EBITDA after 24 months, and lower on a net debt to EBITDA basis. As a result, the combined company will be strongly positioned from day one to pursue future acquisitions to expand
its portfolio in both specialty pharmaceuticals and generics, in line with Tevas stated strategy to grow through value-enhancing and complementary acquisitions. |
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Substantial Cost Synergies and Future Value Creation Consistent with Tevas Stated Business Development Criteria: Teva and Mylan stockholders would benefit from the opportunity to participate in the strong
near- and long-term value creation potential of the combined company. The opportunities for substantial achievable cost synergies and tax savings are estimated to be approximately $2 billion annually and are expected to be largely achieved by the
third anniversary of the closing of the transaction. Teva expects the savings to come from operational, SG&A, manufacturing and R&D efficiencies, as well as tax savings. |
Teva believes the combination would be significantly accretive to non-GAAP EPS, including expected non-GAAP EPS accretion in the mid-teens in
the first year, and approaching 30% by the third year.
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Ongoing Return of Capital to Stockholders: Teva expects to continue its current dividend policy and will also continue to evaluate opportunities to return capital to stockholders on an ongoing basis.
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Timing and Approvals
The proposal was unanimously approved by the Board of Directors of Teva.
This proposal is subject to customary conditions. The transaction would not be subject to a financing condition or require a Teva stockholder vote.
Tevas proposal is contingent on Mylan not completing its proposed acquisition of Perrigo or any alternative transactions.
Teva has carefully
studied the regulatory aspects of a combination of Teva and Mylan, in conjunction with its advisors. Teva is confident that it would be able to structure a transaction that would not contain material impediments to closing and that it can determine
and promptly implement divestitures, as necessary, to gain regulatory clearances.
Teva expects that the proposed transaction can be completed by year-end
2015. Teva notes that there can be no assurance that a transaction between Teva and Mylan will be consummated.
Letter to Mylan
The text of a letter sent to the Executive Chairman of the Mylan Board of Directors on April 21, 2015 is below.
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April 21, 2015 |
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Robert J. Coury |
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Robert J. Coury |
Executive Chairman |
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c/o Mylan Inc. |
Mylan N.V. |
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Robert J. Coury Global Center |
Albany Gate, Darkes Lane |
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1000 Mylan Blvd. |
Potters Bar, Herts |
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Canonsburg, PA 15317 |
EN6 1AG, United Kingdom |
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Dear Robert:
I am writing to share our belief that a combination of Teva and Mylan has compelling strategic and financial benefits for both companies and
would create substantial value for our respective stockholders. The proposed combination of Teva and Mylan would create an industry-leading company, well positioned to transform the global generics space. The company would have a unique and
differentiated business model and the ability to leverage its significant assets and capabilities in generics and specialty. We firmly believe that a combination of Teva and Mylan is a much more attractive and value-creating alternative for Mylan
and its stockholders than Mylans proposed acquisition of Perrigo.
While both Teva and Mylan are already recognized as leaders in
providing high quality, affordable medicines globally, the combination of our companies will dramatically enhance that leadership. The combination of Teva and Mylan would put us in a position to leverage its significantly more efficient and advanced
infrastructure, with enhanced scale, production network, end-to-end product portfolio, commercialization capabilities and geographic reach. Together, we would have a unique and differentiated business model with a focus on complex technologies and
more durable and sustainable products, in combination with robust capabilities in specialty drug development and commercialization. The combination will better address the evolving needs of patients and healthcare systems around the world. Further,
the combined company would have an enhanced financial profile, creating the opportunity for rapid deleveraging and the funding of future growth in generics, specialty and the intersection of the two. The result is an organization with the
scale and reach to excel in the current environment, which I know you appreciate.
As a result, we believe that both of our companies should pursue this combination now. Based on
our analysis of publicly available information, we propose to enter into a transaction to acquire Mylan for $82.00 per share, with the consideration to be composed of approximately 50% cash and 50% Teva stock. The proposal represents a 37.7% premium
to the stock price of Mylan on April 7, 2015, which is the last day of trading prior to Mylans press release regarding its unsolicited proposal for Perrigo. The proposal represents a 48.3% premium to the unaffected stock price of Mylan on
March 10, 2015, which is the last day of trading prior to widespread speculation of a transaction between Teva and Mylan.
This
transaction is unique in what it accomplishes for Mylan stockholders: a meaningful upfront premium, significant and immediate cash consideration and liquidity, as well as ownership in a leading global pharmaceuticals company from which they can
benefit from the upside created by our combination. These benefits are not available to Mylan stockholders in the proposed acquisition of Perrigo or its stand-alone strategy.
We have a very successful track record of integrating companies that are highly diverse from a business, geographic and cultural perspective.
We foresee no impediments to successfully integrating and preserving the best elements of our respective organizations, especially given our key shared attributes including core focuses on generics, complementary geographic presences and
success-driven cultures. The combined company would provide meaningful additional opportunities for employees of both companies.
This
proposed transaction also advances the best interests of all other stakeholders of Mylan and the communities in which we both operate. It continues to advance Mylans strategy and enhances opportunities to provide the world population with
access to the broadest range of affordable, high quality medicine. Additionally, Teva has maintained its European headquarters in the Netherlands for several years and is invested in the local community.
This transaction is immediately actionable and can be completed promptly. We and our advisors have carefully studied the regulatory aspects of
a combination of Teva and Mylan, and we are confident that we would be able to structure a transaction that would not contain material impediments to closing and that divestitures as necessary to gain regulatory clearances can be determined and
implemented promptly. We intend to file for clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 immediately and to begin the notification process with the European Commission shortly.
We were disappointed that you prematurely addressed a potential combination in your press release issued on April 17, 2015. We would
welcome the opportunity to meet with you to address your points and to elaborate on the rationale of our proposed combination, its appealing economics and the benefits it provides for our respective stakeholders.
This proposal was unanimously approved by our Board of Directors, and we are fully committed to this combination. In light of the benefits of
the transaction and the opportunity to complete this transaction now, we believe it is appropriate for both companies to engage in discussions as soon as possible. We believe that a rapidly negotiated transaction is in the best interests of both
Mylan and Teva and their respective stockholders and other stakeholders. As such, we are prepared to begin working with you immediately and to commit the resources and time required to complete the transaction expeditiously. We have retained
Barclays and Greenhill & Co. as our financial advisors and Kirkland & Ellis LLP as our legal counsel for the transaction.
This non-binding proposal is subject to customary conditions, including receipt of regulatory
approvals. The transaction would not be subject to a financing condition or require Teva stockholder approval. Furthermore, this proposal is contingent on Mylan not completing its proposed acquisition of Perrigo or any other alternative
transactions.
We are very enthusiastic about the opportunity to complete this transaction with you and look forward to hearing from you
promptly. We remain at your disposal and that of your Board of Directors to address any questions you may have.
Very truly yours,
/s/ Erez Vigodman
Erez Vigodman
President and Chief Executive Officer
Advisors
Barclays and Greenhill &
Co. are serving as financial advisors to Teva. Kirkland & Ellis LLP and Tulchinsky Stern Marciano Cohen Levitski & Co are serving as legal counsel to Teva, with De Brauw Blackstone Westbroek N.V. and Loyens & Loeff N.V.
acting as legal advisors in the Netherlands.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare
solutions to millions of patients every day. Headquartered in Israel, Teva is the worlds largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every
therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. Teva integrates its generics and
specialty capabilities in its global research and development division to create new ways of addressing unmet patient needs by combining drug development capabilities with devices, services and technologies. Tevas net revenues in 2014 amounted
to $20.3 billion. For more information, visit www.tevapharm.com.
Safe Harbor Statement
This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on
managements current beliefs and expectations and involve a number of assumptions, known and unknown risks and uncertainties that change over time and could cause future results, performance or achievements to differ materially from the
results, performance or achievements expressed or implied by such forward-looking statements. These assumptions, known and unknown risks and uncertainties include, but are not limited to, those discussed in our Annual Report on Form 20-F for the
year ended December 31, 2014 and in our other filings with the U.S. Securities and Exchange Commission (the SEC), and those relating to Mylans business, as detailed from time to time in Mylans filings with the SEC, which
factors are incorporated herein by reference. Forward-looking statements are generally identified by the words expects, anticipates, believes, intends, estimates, will,
would, could, should, may, plans and similar expressions. All statements, other than statements of historical fact, are statements that could be deemed to be forward-looking statements,
including statements about the proposed acquisition of Mylan, the financing of the proposed transaction, the expected future performance (including expected results of operations and financial guidance), and the combined companys future
financial condition, operating results, strategy and plans. Important factors that could cause actual results, performance or achievements to differ materially from the forward-looking statements we make in this communication include, but are not
limited to: the ultimate outcome of any possible transaction between Teva and Mylan, including the possibility that no transaction between Teva and Mylan will be effected or that a transaction will be pursued on different terms and conditions; the
effects of the business combination of Teva and Mylan, including the combined companys future
financial condition, operating results, strategy and plans; uncertainties as to the timing of the transaction; the possibility that the expected benefits of the transaction and the integration of
our operations with Mylans operations (including any expected synergies) will not be fully realized by us or may take longer to realize than expected; adverse effects on the market price of Tevas or Mylans shares, including
negative effects of this communication or the consummation of the possible transaction; the ability to obtain regulatory approvals on the terms proposed or expected and satisfy other conditions to the offer, including any necessary stockholder
approval, in each case, on a timely basis; our and Mylans ability to comply with all covenants in our or its current or future indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default
of other obligations under cross default provisions; our and Mylans exposure to currency fluctuations and restrictions as well as credit risks; the effects of reforms in healthcare regulation and pharmaceutical pricing and reimbursement;
uncertainties surrounding the legislative and regulatory pathways for the registration and approval of biotechnology-based medicines; the impact of competition from other market participants; adverse effects of political or economic instability,
corruption, major hostilities or acts of terrorism on our or Mylans significant worldwide operations; other risks, uncertainties and other factors detailed in our Annual Report on Form 20-F for the year ended December 31, 2014 and in our
other filings with the SEC; and the risks and uncertainties and other factors detailed in Mylans reports and documents filed with the SEC. All forward-looking statements attributable to us or any person acting on our behalf are expressly
qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on any of these forward-looking statements. Forward-looking statements speak only as of the date on which they are made and we assume no
obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
ADDITIONAL
INFORMATION
This communication is for informational purposes only and does not constitute an offer to buy or solicitation of an offer to sell any
securities. This communication relates to a proposal which Teva has made for a business combination transaction with Mylan. In furtherance of this proposal and subject to future developments, Teva and Mylan may file one or more proxy statements,
registration statements or other documents with the SEC. This communication is not a substitute for any proxy statement, registration statement, prospectus or other document Teva and/or Mylan have filed or may file with the SEC in connection with
the proposed transaction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT(s), REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any
definitive proxy statement(s) (if and when available) will be mailed to stockholders. Investors and security holders may obtain free copies of this communication, any proxy statement, registration statement, prospectus and other documents (in each
case, if and when available) filed with the SEC by Teva through the web site maintained by the SEC at http://www.sec.gov.
Contacts
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Investor Relations |
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Teva United States |
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Teva Israel |
Kevin C. Mannix 215-591-8912 |
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Tomer Amitai 972 (3) 926-7656 |
Ran Meir 215-591-3033 |
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D.F. King & Co., Inc. |
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Jordan Kovler |
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212-493-6990 |
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Media |
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Teva United States |
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Teva Israel |
Denise Bradley 215-591-8974 |
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Iris Beck Codner 972 (3) 926-7687 |
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United States |
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The Netherlands |
Joele Frank, Wilkinson Brimmer Katcher Joele
Frank / Tim Lynch / Meaghan Repko / Alyssa Cass 212-355-4449 |
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Citigate First Financial Uneke Dekkers / Petra
Jager / Suzanne Bakker + 31 20 575 40 10 |
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