Teva CEO Shlomo Yanai
Teva to buy Barr Pharma for more than $7 billion
Israeli drugmaker says will purchase rival generic drug company in move to expand its presence in US, Eastern European markets
Israeli drugmaker Teva Pharmaceutical said Friday it will buy rival generic drug company Barr Pharmaceuticals for more than $7 billion in a move to expand its presence in US and Eastern European markets.
Teva Pharmaceutical Industries Ltd. also is offering to assume $1.5 billion of Montvale, N.J.-based Barr Pharmaceuticals Inc.'s debt.
Barr shareholders will receive $39.90 in cash and 0.6272 of a Teva American Depositary Receipt for each share they own, or a total purchase price of $66.50 per share. That represents a 16 percent premium to Barr's $57.17 closing price Thursday.
Barr shares finished at $46.82 Wednesday, before reports that a deal was in the works sent the stock climbing 22 percent.
Already the largest generic drug maker in the world, Teva reported $9.4 billion in sales in 2007. Barr posted $2.5 billion in revenue, and the company describes itself as the largest maker of oral contraceptives in the US. It began selling a generic version of Bayer AG's birth-control pill Yasmin in the US in July.
Barr also has the rights to sell a generic version of the attention deficit hyperactivity disorder drug Adderall XR starting April 1, 2009.
The deal will give Teva a larger presence in Central and Eastern Europe, where Barr already has a footprint because of its 2006 purchase of Pliva, a Croatian drug maker.
Based on Barr's 108.1 million shares outstanding at April 28, the deal is valued at $7.19 billion before assumed debt. In a statement, the companies valued the deal at $7.46 billion before debt.
Barr stock jumped $3.82, or 6.7 percent, to $60.99 in premarket trading, which put the shares on pace for their highest opening in more than two years. Teva's ADRs gave up $1.50, or 3.7%, to $39.55, which would be an annual low for the stock.
