On Jul. 27, 2016– Teva Pharmaceutical Industries Ltd., (NYSE:TEVA)(TASE:TEVA) and Allergan plc (NYSE:AGN) reported that the U.S. Federal Trade Commission (FTC) has accepted the proposed consent order in connection with the pending acquisition of Allergan’s generics business ("Actavis Generics") by Teva Pharmaceutical Industries Ltd (Press release, Teva, JUL 27, 2016, View Source;p=RssLanding&cat=news&id=2188969 [SID:1234514078]).
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With the acceptance of the proposed consent order, Teva has satisfied the regulatory approval requirements under the purchase agreement to complete the acquisition of Actavis Generics.
"We are pleased to have received all of the requisite regulatory approvals for our acquisition of Actavis Generics," said Erez Vigodman, President and CEO, Teva. "This acquisition is a transformative step for Teva as we continue to claim a differentiated space in the global pharmaceutical industry. The generics industry is one of the most attractive industries in the world in terms of growth rates, profitability, return to investors and contribution to healthcare systems and societies around the world."
Mr. Vigodman continued, "The new Teva will be ideally positioned to realize the opportunities the global and U.S. generic markets offer. Through our best-in-class R&D capabilities and product pipeline, the world’s largest medicine cabinet and product portfolio, one of the most competitive fully integrated operational networks in the industry, extensive global commercial deployment and go-to-market platforms, we will be able to achieve greater efficiencies for the benefit of patients, healthcare systems and investors around the world. The transaction strongly reinforces our strategy and yields very compelling economics. As a result, it opens a new set of possibilities for us in generics and specialty medicines."
Once the transaction is completed, Teva will have approximately 338 product registrations pending FDA approval and will hold the leading position in first-to-file opportunities with approximately 115 pending ANDAs in the U.S. Additionally, Teva will have a commercial presence across 80 markets, including a top-three leadership position in over 40 markets.
The transaction is expected to achieve $1.4 billion in operational and tax synergies achievable by the end of 2019. It is significantly accretive to non-GAAP EPS, with approximately 14% accretion in 2017 and 19% accretion in 2019, and is expected to generate 9.3% ROIC by the end of 2019. The combined company is expected to generate more than $25 billion of free cash flow from deal close to the end of 2019, which will allow for rapid deleveraging and give Teva the ability to pursue acquisitions of attractive branded and pipeline assets as well as deals that further expand the company’s footprint in key growth markets.
The transaction is expected to close next week.