Teva To Buy Allergan Generics For $40.5 Bln; Withdraws Offer For Mylan

(RTTNews) - Israeli generic drugmaker Teva Pharmaceutical Industries Ltd. (TEVA) announced Monday that it has signed a definitive agreement with Allergan plc (AGN) to acquire Allergan Generics in a transaction valued at $40.5 billion.

Upon closing, Allergan will receive $33.75 billion in cash and shares of Teva valued today at $6.75 billion, representing an estimated under 10% ownership stake in Teva.

Teva believes the acquisition will be significantly accretive to non-GAAP earnings per share, including expected double-digit non-GAAP EPS accretion in 2016 and more than 20% accretion in year two and year three following the close of the transaction.

The transaction was unanimously approved by the Boards of Directors of Teva and Allergan and is expected to close in the first quarter of 2016.

The deal is expected to provide substantial financial benefits for Teva including highly diversified revenues and profits, and substantial cost synergies and tax savings.

Following the completion of the acquisition, Teva is expected to have pro forma sales of approximately $26 billion and EBITDA of approximately $9.5 billion in 2016.

Separately, Teva announced that it has withdrawn its cash and stock proposal to acquire all of the outstanding ordinary shares of Mylan N.V. (MYL) and Teva does not intend to continue to pursue a transaction with Mylan at this time.

Teva's decision to terminate the proposal to acquire Mylan follows its definitive agreement with Allergan to acquire Allergan Generics.

Teva said it intends to review its options with respect to its ownership of approximately 4.6% of the outstanding ordinary shares of common stock of Mylan.