August 3, 2016 – Teva Pharmaceutical today completed its US$40 billion acquisition of the generics arm of rival Allergan, a move the Israeli firm hailed as confirmation of its intention to become one of the world’s largest drug manufacturers.
“Teva Pharmaceutical Industries Ltd. and Allergan plc today announced that Teva has completed its acquisition of Allergan’s generics business (Actavis Generics)” the Israeli company said in a statement.
The US$40-billion deal, the largest in Israeli history, was agreed last year but finally confirmed yesterday.
The Israeli multinational was already the world’s largest manufacturer of generic drugs – non-branded, cheaper alternatives to branded drugs that have lost their patent.
Allergan Generics was the third largest in the same market by sales, and the acquisition gives Teva a large market lead and catapults it into the top 10 pharmaceutical firms globally, according to the company’s figures.
Teva CEO Erez Vigodman said it was part of a wider plan to become one of “most competitive, fully integrated companies in the industry”.
“We service as a company 250 million people daily in the world,” he said in an interview ahead of the confirmation of the deal.
After the deal, he said, “one in six prescriptions in the US (will be) Teva, one in six in the UK, one in eight in Germany”. He added that the deal would bring about net efficiency savings of US$1.4 billion over the next three years.
Teva had revenues of US$19.6 billion in 2015, but the firm estimates that after the takeover these will rise to at least US$26.7 billion by 2019.
Generic drugs are sold at far cheaper prices than their named counterparts, with profit margins far finer accordingly.
Teva wants to branch out into other fields apart from generics, Vigodman said, with key acquisitions having already taken place in Mexico, Japan and elsewhere.