Sector News

Reuters: Teva set to win EU okay for $40.5 billion Allergan deal

March 11, 2016
Life sciences

Teva Pharmaceutical Industries is expected to win EU antitrust approval for its $40.5 billion bid for Allergan’s generics unit after agreeing to sell off some of its products to appease regulators, three people familiar with the matter said on Wednesday.

Teva, the world’s biggest generic drugsmaker, will divest some drugs already on the market and others in the pipeline to address competition concerns by the European Commission, the people said. The package includes products from both Teva and Allergan.

Other sources had previously told Reuters that assets worth about $1 billion in the United States, Europe and the Middle East would be sold in order to secure the green light from regulators.

Teva will gain bigger economies of scale, a crucial element in the low-margin generic drugs business, with the deal, the largest in Israel’s corporate history.

The Commission, which is scheduled to decide on the case on Thursday, and Teva declined to comment.

The deal, which requires U.S. approval, has triggered a warning from the American Antitrust Institute that a more concentrated generic market usually comes with higher prices. The think-tank also said divestments may not be enough to ensure competition in the market in a letter to the U.S. Federal Trade Commission in January.

Dublin-based Botox-maker Allergan in turn is to be acquired by Pfizer Inc (PFE.N) in a $160 billion deal creating the world’s largest drugmaker.

By Foo Yun Chee

Source: Reuters

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