Teva divesting $1 billion in assets to clear Allergan deal
By Carl O'Donnell
(Reuters) - Teva Pharmaceutical Industries Ltd (TEVA.TA: Quote) is in the process of divesting about $1 billion worth of assets to address antitrust concerns over its deal to buy Allergan Plc's (AGN.N: Quote) generic drugs business, people familiar with the matter said.
Teva agreed in July to purchase Allergan’s generics unit for $40.5 billion in cash and stock, establishing the Israeli company as the largest manufacturer of generic drugs at a time when pharmaceutical benefits managers and insurers are putting increased pressure on drug prices.
While small by comparison, a successful divestiture will help ensure that the deal with Allergan is completed as scheduled by the first quarter of 2016, also allowing Allergan to merge with Pfizer Inc (PFE.N: Quote) and create the world's largest drugmaker.
Pfizer's $160 billion acquisition of Allergan, the largest healthcare merger of all time, is contingent upon Allegan completing the sale of its generic drugs business to Teva. That deal is expected is to close in the second half of 2016.
The assets that Teva is divesting span the United States, Europe and the Middle East, and will be sold in a series of processes that are expected to be completed in early 2016, the sources said.
Teva expects to complete its U.S. divestitures by January, and has received offers from a number of generic pharmaceutical companies, one of the sources added.
The sources asked not to be identified because the matter is confidential. Teva was not immediately available for comment.
The deal between Teva and Allergan has been seen as a potential source of antitrust concern due to the overlap in the two companies' drug portfolios.
Shortly before the deal, Allergan received a subpoena from the antitrust division of the Department of Justice related to the pricing of its generic products.
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