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Teva strips $1 billion worth of assets to clear Allergan deal

Published on 04/12/15 at 09:45am
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Teva Pharmaceuticals is thought to be in the process of stripping nearly $1 billion worth of assets to address antitrust concerns over its deal to buy Allergan’s generic drugs business.

The deal between Teva and Allergan has been seen as a potentially antitrust arrangement due to the overlap in the two companies' drug portfolios. Before the deal, Allergan received an order from the antitrust division of the Department of Justice related to the pricing of its generic products.

In July, Teva agreed to purchase Allergan’s generics unit for $40.5 billion in a combination of cash and stock. This will make the Israeli company the largest manufacturer of generic drugs, at a time when generics companies are looking to profit from increased pressure on drug prices.

A divestment could be crucial in ensuring that Teva’s takeover of Allergan’s generics business is completed as scheduled by the first quarter of 2016. If so, this will allow Allergan to merge with Pfizer, creating the world's largest drugmaker.

Pfizer's $160 billion acquisition of Allergan, which is thought to be the largest merger in pharmaceutical history, is predicated upon Allegan finalising the sale of its generic drugs business to Teva, which is expected is to close in the second half of 2016.

The assets that Teva is stripping are thought to be in the United States, Europe and the Middle East. The assets will be sold in a series of processes and is thought to be completed in early 2016.

Yasmita Kumar

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