Watson buys Actavis to create generics giant
pharmafile | April 27, 2012 | News story | Sales and Marketing | Actavis, Watson, generics
Watson Pharmaceuticals is to buy rival Actavis Group in a move that will create the third largest generics manufacturer in the world.
US-based Watson is paying €4.25 billion to seal the deal, creating a combined entity with a turnover of $8 billion, 17,000 employees, 20 manufacturing sites and a dozen R&D centres worldwide.
“In a single, commercially compelling transaction, we more than double Watson’s international access and strengthen our commercial position in key established European markets,” said Watson chief executive Paul Bisaro.
He also cited ‘exciting emerging growth markets’ including central and eastern Europe and Russia as reasons for the acquisition: Actavis last year also launched a new business unit to tap into the fast-growing Latin American generics market, with Brazil as one of its key targets.
Watson says it means 40% of its generic revenue will come from outside the US after the deal goes through towards the end of this year – up from 16% at present.
Merging the two firms will create annual synergies of $300 million, in areas such as R&D and corporate activity, within three years but there is no word yet on potential redundancies.
As well as the upfront payment, Watson will take on a maximum of €100 million of debt – as part of the agreement, Actavis stakeholders could also receive up to 5.5 million Watson shares.
Privately-owned Actavis turned over $2.5 billion last year, is present in 40 countries, markets more than 1,000 products worldwide, and has made no secret in the past of a willingness to offer itself to the right bidder.
The Swiss company’s chief executive Claudio Albrecht said: “We have successfully placed Actavis in a strong position to meet the future growth opportunities in the generic pharmaceutical industry.”
“Together Watson and Actavis will be well placed in the fast-paced and dynamic biosimilars market,” Albrecht added.
Watson is currently developing biosimilars in women’s health and oncology and distributes branded drugs through its Anda Distribution business.
Adam Hill
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