Upon closing of the transaction, which has been unanimously approved by the Boards of Directors of both the companies, Allergan will receive $33.75bn in cash and Teva shares valued at $6.75bn, which represents a 10% stake in the Israel firm.
Additionally, Allergan retains 50% of Teva’s future economics from generic lenalidomide (Revlimid).
The acquisition will bring to Teva, Allergan’s Actavis global generics business, including the US and international generic commercial units, third-party supplier Medis, global generic manufacturing operations, the global generic R&D unit, the international over-the-counter (OTC) commercial unit (excluding OTC eye care products) and some established international brands.
The transaction is expected to be completed in the first quarter of 2016.
Teva president and CEO Erez Vigodman said: "Through our acquisition of Allergan Generics, we will establish a strong foundation for long-term, sustainable growth, anchored by leading generics capabilities and a world-class late-stage pipeline that will accelerate our ability to build an exceptional portfolio of products – both in generics and specialty as well as the intersection of the two.
"Our respective portfolios of generic medicines and applications are highly complementary, providing Teva with high quality growth and earnings visibility, and the scale and resources to expand upon our specialty capabilities."
The acquisition strengthens Teva’s strategy, accelerates the creation of its new business model and opens a new set of possibilities for the company in generics and specialty.
Allergan president and CEO Brent Saunders said: "This transaction will accelerate Allergan’s evolution into a branded Growth Pharma leader, enable a sharpened focus on expanding and enhancing our global branded pharmaceutical business and strengthen our financial position to build on our proven track-record of value creation led by effective capital deployment."
Allergan has franchises in Eye Care, CNS, Aesthetics, GI and Women’s Health including brands such as Botox, Restasis, Juvederm, Namenda XR, Linzess and Lo Loestrin Fe among others.
Image: The acquisition will see Allergan receive $33.75bn in cash and Teva shares valued at $6.75bn. Photo: courtesy of stockimages/FreeDigitalPhotos.net.