Teva shares rise on Allergan deal news
Shares of Teva Pharmaceutical Industries rose nearly 4 percent Wednesday after the drugmaker said its $40 billion deal to buy Allergan P.L.C.'s generics business is expected to close shortly.
Shares of Teva Pharmaceutical Industries rose nearly 4 percent Wednesday after the drugmaker said its $40 billion deal to buy Allergan P.L.C.'s generics business is expected to close shortly.
On a call with analysts, Teva chief executive officer Erez Vigodman said the acquisition - for $33.5 billion in cash and about 100 million of Teva's shares - should close "at any time now." He said he knew of nothing that would hold up the purchase, which awaits final clearance from the U.S. Federal Trade Commission.
The deal will result in $1.4 billion in cost synergies and tax savings by the end of 2019, and create "strong cash flow" of more than $25 billion from the deal close through 2019, Vigodman told investors.
Revenues will grow from $19.7 billion in 2015 to between $26.7 billion and $27.8 billion in 2019, and net income will rise from $4.7 billion to between $7.5 billion and $8.1 billion in the same period, Teva said.
"We view the update as reassuring that the strategy and outlook for generics is intact," analyst Andrew Finkelstein at Susquehanna Financial Group said in a client note. "We expect the update to be received positively by investors, given Teva's statements of confidence in closing the deal."
To meet antitrust regulatory requirements, Teva will sell some drugs "with aggregate revenues in 2015 of about $1.1 billion," the company said. Allergan said in a regulatory filing that it will exclude two products, Actonel and Carafate, from the sale.
Israel-based Teva, with North America headquarters in North Wales, Montgomery County, announced in July 2015 that it would buy Allergan's generic pharmaceuticals business. Allergan had put the business up for sale after it merged with Actavis P.L.C. last year.
Teva, the world's largest maker of generic versions of brand-name medicines, employs more than 2,000 in North Wales, Horsham, Frazer, West Chester, and New Britain. Teva's Pennsylvania locations handle a mix of functions, including drug research and development, support, sales, marketing, and distribution.
Teva shares closed up 3.83 percent, or $2.01, to $54.47, while Allergan gained 0.61 percent, or $1.47, to $241.17.
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