"The acquisition of Barr is a very good deal," Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) president and CEO Shlomo Yanai told "Globes", following the company's announcement that it would acquire Barr Pharmaceuticals Inc. (NYSE: BRL) for $7.46 billion. Teva will also assume Barr's $1.5 billion debt.
The market welcomed the news; Teva rose 4.4% on Nasdaq to $42.87 on Friday on quintuple its average daily trading volume. Yanai added, "It's said that the baker shouldn’t testify about his own dough, but in this case, the market testifies that this is a good deal."
Yanai noted, "This deal also gets a high grade in terms of the strategic fit between the two companies. Barr gives Teva market share, will widen Teva's lead over its competitors, add infrastructure in important markets in Central and Eastern Europe, and will increase our portfolio. It will also bring us a new and attractive field of women's medicine. The deal is also good financially. It will add to Teva's profits within a year, and there is a lot of synergy between the companies."
At a conference call, Barr CEO Bruce Downey said that this was Teva's third attempt to acquire the company.
Yanay commented in response, "It's less important to look at the past. It didn’t happen before, each time for a different reason, once when we decided to go for a different company, Ivax Corporation. This time, I decided that the conditions were ripe to link up the two companies, and we had a dialogue of three to four months, which was completed Thursday night."
Yanay added that Teva will revise its strategic targets upwards when the deal is closed. The current target is a net profit of more than $4 billion on $20 billion revenue in 2012. He cautioned, however, "Teva's strategic plan is still relevant and valid. It is a strategy of what and how. Our strategic plan does not include large acquisitions, so that when this deal is closed, we'll revise the targets upwards." This will probably happen in early 2009.
Published by Globes [online], Israel business news - www.globes-online.com - on July 20, 2008
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