Pharma BD Deal Intelligence

Teva Pharmaceutical Industries Ltd. / Allergan plc (Generics Business)

2015 · Asset Purchase · $40.5B · Complete

A $40.5B bet to make Teva the world's largest generics maker instead saddled it with debt and integration drag as pricing pressure hammered the combined Actavis/Anda portfolio—one of the decade's clearest cautionary tales in generics consolidation.

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Teva acquired Allergan's global generics business (formerly Actavis Generics) for approximately $40.5 billion in cash and stock, becoming the world's largest generics pharmaceutical company by revenue with over 1,000 generic molecules across all major markets.

Key facts

• Announced Jul 27, 2015
• Closed Aug 02, 2016
• Deal value $40.5B
• Deal type Asset Purchase
• Therapeutic area Cardiovascular, Neurology, Oncology, Respiratory, Women's Health
• Indications Multiple therapeutic areas (generic portfolio)
• Key assets Actavis global generics portfolio (~1,000 molecules), Anda generic distribution business, Global manufacturing network (over 40 facilities), Generics pipeline (~300 pending ANDAs), International generics operations (60+ countries), Generic portfolio
• Mechanism Multiple (generic portfolio spanning all major drug classes)

Deal timeline

• Jul 27, 2015
  Acquisition announced at $40.5B

  Teva announces agreement to acquire Allergan's global generics business for $40.5B ($33.75B cash + shares), aiming to create a transformative generics and specialty company.

• Mar 15, 2016
  EU approves with product divestitures

  European Commission approves the acquisition subject to divestitures of certain generic products sold in 24 European countries to preserve competition.

• Jul 27, 2016
  FTC requires 79-drug divestiture

  FTC requires Teva to divest rights to 79 pharmaceutical products across 11 buyers -- the largest drug divestiture in FTC pharma merger history -- to resolve antitrust concerns.

• Aug 02, 2016
  Teva closes $40.5B Allergan Generics buy

  Teva completes acquisition of Allergan's worldwide generics business (Actavis Generics), becoming the world's largest generic drug company with ~$35B in acquisition-related debt.

• Dec 31, 2017
  Revenue peaks then declines sharply

  Teva reports 2017 revenue of ~$22.4B but issues profit warning, slashing guidance by $1B. Copaxone generic erosion and US generics pricing pressure compound debt burden.

• Dec 31, 2018
  Revenue falls 16% to $18.8B

  Teva revenue drops to $18.8B in 2018, down 16% YoY, driven by Copaxone generics, US pricing pressure, and product divestitures. $35B debt load constrains operations.

• Jan 01, 2020
  Verdict: Value-destructive deal

  Teva's $40.5B Allergan Generics acquisition is widely regarded as value-destructive. Stock fell ~70% post-close, debt burden crippled operations, and generics pricing collapsed. CEO departed 2017.

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