UPDATE: Teva to hawk $1 billion in assets to clear massive Allergan generics deal
UPDATE: European regulators on Friday announced that Teva had committed to selling off assets across the U.S., Europe, and Middle East in order to allay the antitrust concerns described below. Sources told Reuters that the Israeli pharma giant will sell off about $1 billion in assets.
Regulators in both the U.S. and Europe have voiced reservations about Teva's $40.5 billion deal to buy Allergan's generic drugs unit.
- Teva is likely to make concessions to E.U. regulators this week in order to placate antitrust concerns over its acquisition of Allergan’s generics portfolio, Bloomberg reports. Teva and Allergan have a Thursday night deadline to propose concessions to regulators.
- In July 2015, Teva struck a cash-and-stock deal to acquire Allergan's generics portfolio for $40.5 billion ($33.75 billion in cash plus a 10% stake in Teva valued at $6.75 billion).
- The EU could okay the transaction early if regulators are satisfied by Teva’s proposals.
As it stands now, the top three generics companies by sales are Teva, Novartis/Sandoz, and Allergan. Teva already has a market capitalization of roughly $60 billion.
If this acquisition gets a green light from regulators, Teva will expand its edge as the largest generics drugmaker in the world. The U.S. Federal Trade Commission is also examining the deal.
Pfizer and Allergan are in the process of closing their $160 billion mega-merger, in which Allergan technically bought Pfizer in a reverse merger. Regulators in both the U.S. and the E.U. will scrutinize the deal, but divestments like this deal with Teva should help move the merger forward.