By Dana Mattioli, Jonathan D. Rockoff, Dana Cimilluca and Liz Hoffman
Israeli drug maker Teva Pharmaceutical Industries Ltd. is in
talks to combine with Allergan PLC's big generic-drug business in a
move that would represent a continuation of a boom in healthcare
deal making and likely the end of Teva's pursuit of another
acquisition.
A deal for the Allergan business, valued at about $45 billion,
could be announced as early as Monday, according to people familiar
with the matter. The Allergan unit would be spun off and combined
with Teva, which has a market value of $60 billion, said one of the
people.
Teva has been seeking to buy Mylan NV, a deal Mylan has been
resisting as it pursues fellow drug maker Perrigo Co. PLC.
For Teva, a deal with Allergan would largely give the company
what it has been seeking from a Mylan deal: increased scale in the
competitive generic-drug market, and an opportunity to pursue
further cost reductions that could help it cope with the razor-thin
margins for the low-priced medicines.
Allergan's generics portfolio includes more than 1,000 drugs,
including branded generics, established brands and over-the-counter
products, according to the company's website. Key products include
generic versions of OxyContin and the Concerta
attention-deficit-hyperactivity-disorder drug.
Teva's Chief Executive of its global generic-medicines group,
Sigurdur Olafsson, worked at Actavis (which changed its name to
Allergan when it completed its nearly $70 billion purchase of that
company this year) in its global generics business until 2014.
Bloomberg News earlier reported that Allergan was considering
spinning off or selling part or all of its generics business.
Allergan's market value Friday stood at $124 billion.
Should shareholders react positively to any deal announcement
between the companies--as they have in many such cases lately,
among those benefitting could be Glenview Capital Management LLC.
The hedge fund was recently building a stake in Allergan, after
reaping more than $3 billion on a big bet on health-care stocks in
recent years.
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