Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) reported that it will acquire NYSE-traded Barr Pharmaceuticals (NYSE:BRL).
Teva will pay $39.90 in cash, and 0.6272 of its ADRs, for each share of Barr. Based on Teva's closing price on Wednesday, the value amounts to $66.50 per Barr share. The purchase price represents a premium of 42% on Barr's closing price on July 16.
Teva has reported two acquisitions so far this year. It paid $400 million to buy CoGenesys, and its second purchase, set to close soon, is Bentley Pharmaceuticals, Inc. (NYSE: BNT).
At the end of the first quarter, Teva had $3.6 billion in cash, so it will seek to raise funds for this purchase.
Barr develops and markets around 120 proprietary and generic pharmaceutical products. p>It is not every day that an Israeli company buys a US company of this size. Teva already has the prerequisite experience, after acquiring Ivax Corporation for an even larger amount. The Ivax acquisition was half in cash and half in Teva stock, after Teva offered Ivax shareholders a choice of cash or 0.85 Teva share per Ivax share. The deal was closed in early 2006 and Teva raised $2.75 billion in a bond issue to repay the loans taken to pay for it.
Teva CEO Shlomo Yanai said, “The combination of our two companies provides an outstanding opportunity strategically and economically: It will enhance our market share and leadership position in the US and key global markets, further strengthen our portfolio and pipeline, and provide upside to our strategic plan, by allowing us to exceed our 20/20 goals for 2012.”
Teva rose 4.4% on Nasdaq on Friday to $42.87, giving it a market cap of $33.1 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 20, 2008
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