Hikma to buy Boehringer's U.S. generics unit for $2.65 billion
(Reuters) - Hikma Pharmaceuticals Plc (HIK.L: Quote) said it would buy German drugmaker Boehringer Ingelheim's U.S. specialty generic drugs business for about $2.65 billion in cash and stock to bolster its presence in the United States.
Hikma said it will pay about $1.18 billion in cash and issue 40 million new Hikma shares, or about 16.71 per cent of its issued share capital, for Boehringer's Roxane Laboratories Inc and Boehringer Ingelheim Roxane Inc on closing of the deal.
The Jordanian company, which makes and markets branded and non-branded generics and injectable drugs, said the deal would make it the sixth biggest U.S. generics provider.
Shares in the company rose 8 percent to 2,253 pence in early trading on Tuesday. The stock has lost about 13 percent since its inclusion in Britain's benchmark FTSE 100 .FTSE equity index in March.
The transaction is the latest in a string of deals in the generics sector, where economies of scale are important because of the highly competitive nature of the market.
Israel’s Teva Pharmaceutical Industries (TEVA.TA: Quote) agreed on Monday to pay $40.5 billion for Allergan's (AGN.N: Quote) generic drugs business, solidifying Teva's position as the world's No. 1 maker of generics.
Hikma's new acquisition follows from its purchase of Boehringer's U.S. generic injectable drugs business and manufacturing operations in Ohio last year.
The United States accounted for more than half of Hikma's 2014 revenue. The generics division is its smallest, accounting for about 15 percent of revenue.
Hikma said the deal valuation was based on an agreed issue price for the new Hikma shares of 23.50 pounds per share and an exchange rate of 1.56 dollars to the pound. Continued...