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MERGERS AND ACQUISITIONS

Teva Triumphs

Generics giants beats out Pfizer in $5 billion bid to buy Ratiopharm.

The Burrill Report

“The agreement will bolster Teva's European market share and is likely to shore up its defenses against the growing tide of interest in generics revenue from companies like Pfizer.”
 
Teva Pharmaceutical will pay about $5 billion for Germany's second largest generic drugs maker, Ratiopharm, beating out Pfizer's bid and maintaining its rank as the world's top generics company by sales. Novartis remains the world's second-biggest generics maker. Ratiopharm is sixth-biggest.
 
The agreement will bolster Teva's European market share and is likely to shore up its defenses against the growing tide of interest in generics revenue from companies like Pfizer, which generally rely on pricier discovery-driven portfolios and pipelines.
 
In January, Pfizer said it would expand its burgeoning generics business through a new partnership with India's Strides Arcolab as part of its relatively established products business unit. In the same vein, AstraZeneca announced March 16 it would be ramping up its generics emphasis, but with a focus on emerging markets instead of established ones.
 
Teva made its own expansionist grab in 2008 when it acquired Barr Pharmaceuticals for $7.5 billion. But its dedication to generics makes it far less desperate than companies like Pfizer, which continue to face the specter of diminished revenue when patents on its top revenue generators begin to expire in 2011 and 2012.
 
Still, Teva’s president and CEO Shlomo Yanai called the acquisition “important” for his company, saying that it "is perfectly aligned with our long-term strategy in which Europe is an important pillar and growth driver."
 
Pfizer reportedly bid $4.1 billion for Rationpharm, but took a pass when it came to offering a higher offer than Teva's.
 
Teva expects the deal will be to be accretive within three quarters after closing and to save it at least $400 million within three years. The transaction remains subject to certain conditions including regulatory approvals.


March 18, 2010
http://www.burrillreport.com/article-teva_triumphs.html

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