DOW JONES NEWSWIRES
Teva Pharmaceutical Industries Ltd. (TEVA) has agreed to buy
Cephalon Inc. (CEPH) for $6.8 billion, building its branded and
specialty pharmaceuticals business as it seeks growth to meet its
2015 revenue targets.
Cephalon shares rose 5.5% to $81.25 in premarket trading,
compared with the $81.50 offer price. Teva's American depositary
shares climbed 3.4% to $47.30.
Teva executives had indicated at an investor meeting earlier
this year they were on the hunt for acquisitions and would pursue a
wide range of deals, including those that would build on its core
generics business or others that would boost its presence in
branded drugs.
Cephalon, meanwhile, had been fighting a hostile $5.7 billion
offer from Valeant Pharmaceuticals International Inc. (VRX, VRX.T).
Canada's Valeant had proposed to remove and replace board members
in connection with its $73-a-share bid.
Valeant shares were down 7.9% at $48.50 in recent premarket
trading in New York.
Cephalon faces significant business challenges, as it is in the
middle of a long-term plan to replace sales of its top-selling
product with a similar follow-up drug. It also is dealing with a
leadership transition, caused by the death of its founder and
longtime chief executive in December.
Teva said Monday it expects the deal to immediately add to its
adjusted earnings. It sees the purchase boosting its profit on a
generally accepted accounting principles basis within the fourth
quarter of closing.
The company, the largest generic drug maker in the world, had
said in February it needed to add $4 billion to $5 billion in
annual revenue to meet its 2015 target of $31 billion. In March it
and Procter & Gamble Co. (PG) unveiled a venture expanding its
over-the-counter drug businesses outside North America. Its last
major U.S. acquisition was its 2008 purchase of Barr
Pharmaceuticals for $7.46 billion.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com