In the largest corporate acquisition ever by an Israeli company, Teva Pharmaceuticals yesterday agreed to buy Dublin-based Allergan Generics for £26 billion.
Teva is already one of the world’s largest pharmaceutical companies. However, it has faced a turbulent recent period, especially with generic products emerging to rival Teva’s best-selling multiple sclerosis drug Copaxone, which accounts for around half of Teva’s profit. The acquisition of Allergan will help generate other avenues of revenue.
However, the deal surprised much of the business and financial world, as Teva had invested significantly in launching a hostile takeover of US-based company Mylan. That bid has now been dropped, due to the purchase of Allergan. In a conference call yesterday, Teva said it had originally approached Allergan a year ago and then pursued Mylan, only reigniting interest in Allergan during the last several weeks.
Commenting on the deal, Teva’s Chief Executive Erez Vidogman said, “This acquisition comes at a time when Teva is stronger than ever, in both our generics and specialty businesses.” He added, “Teva and Allergan Generics share a commitment to innovation, quality, and improving the health of people around the world. Together, the employees of Teva and Allergan Generics will play a critical role ensuring we capture the full potential value resulting from this transaction.”
Under the agreement, Teva will acquire Allergan’s global generics business, including its generics research and development units, its international over-the-counter commercial unit and manufacturing operations.
Speaking yesterday in the Knesset, Israel’s Prime Minister Benjamin Netanyahu said that the Teva deal underscored Israel’s position as a “major economic power.” He reiterated that “we are interested in encouraging our economy and our private sector as much as possible.” While in recent years, several Israeli companies have been sold to global giants for huge sums, especially in the tech industry, few Israeli companies have been on the purchasing end of a major global deal before Teva’s acquisition of Allergan yesterday.