Allergan sells global generics business to Teva Pharmaceuticals

Allergan has received $33.4 billion in cash and 100.3 million shares of Teva stock valued at $5.4 billion based on the opening price of $53.39 for Teva Pharmaceutical Industries Ltd. shares on August 2, 2016. These shares are subject to a twelve month holding period post-close of the transaction.

Allergan CEO and president Brent Saunders said: "With the divestiture of our Global Generics business, Allergan completes the most crucial step in its strategic evolution into a focused Branded Growth Pharma leader.

"Allergan is the most dynamic and exciting company in our industry and is well-positioned to expand our leadership across our seven key therapeutic areas, enhance our world-class R&D pipeline through Open Science and build on our strong track record of value creation."

Teva has acquired Allergan's legacy Actavis Global Generics business, including the U.S. and international generic commercial units, third-party supplier Medis, global generic manufacturing operations, and the global generic R&D unit, as well as Allergan's international over-the-counter (OTC) commercial unit (excluding OTC eye care products) and certain established international brands. 

Allergan retains its dynamic global branded pharmaceutical business powered by best-in-class products for the central nervous system, eye care, medical aesthetics and dermatology, gastroenterology, women's health, urology and anti-infective therapeutic categories.

"We thank our Global Generics colleagues for their extraordinary efforts in building a leading Generics business. We look forward to seeing their continued success, now combined with Teva's world-class Generics business," added Saunders.

With the completion of the Generics divestiture, Allergan plans to commence its previously announced share repurchase program under board authorization of up to $10 billion of the Company's common stock in the coming days.

"We believe there is no greater investment than Allergan stock, given our high-growth, durable product portfolios, pipeline of 65-plus mid-to-late stage development programs and a balance sheet with significant capital for additional stepping stone acquisition opportunities," said Saunders.

The Company expects to execute an initial $5 billion in open market repurchases over the remainder of 2016. If favorable market conditions persist, the Company will plan to repurchase the remaining $5 billion under the authorization. The program may be discontinued at any time.

"Our capital deployment strategy is focused on creating significant value for shareholders and enhances our growth profile. In addition to the stock repurchase program, the proceeds from the Teva transaction will be used to pay down a significant portion of our debt to maintain our investment grade credit ratings and preserve significant firepower to invest for growth," added Saunders. 

Following the close of the divestiture, Allergan also announced that it plans to provide updated full year 2016 guidance during its second quarter 2016 earnings call on August 8th.