What hasn’t been said about Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA)? It's been said that it's the world's largest generic drug company, that it's Israel's largest company, that it's the most successful company, and that it's a company that acquires other companies on a yearly basis.
There is another feature to Teva, which the media has not mentioned: although the company's name is almost always mentioned whenever one of its competitors is put up for sale, Teva's timing of an acquisition is almost always when no one is talking about it.
This point has came up again recently, in reports about a possible acquisition of Germany's Ratiopharm GmbH, and it is a perfect opportunity to see whether this is a trend or a coincidence.
In recent weeks, Teva has been mentioned as a possible buyer of Ratiopharm. Teva may surprise and acquire the company, but it is worthwhile looking at the last time such an acquisition was in the offing. Two years ago, Teva almost acquired German generic drug company, Merck KgaA (XETRA: MRK), which was ultimately acquired by competitor Mylan Inc. (NYSE: MYL). Three years ago, Teva was mentioned as a candidate to acquire Ireland's Pinewood Healthcare.
"Globes" archives include stories about other "almost" acquisitions by Teva around the world. The company's long history, particularly its long history of M&As, shows that it is consistent potential buyer. In practice, however, when Teva buys, no one knows anything until the press release.
Teva's announcements of its acquisitions of Ivax Corporation and Barr Pharmaceuticals Inc. were not preceded by months of speculation about negotiations. The same is true for Teva's other acquisitions.
True, there is always a first time, and this time Teva may acquire Ratiopharm, since it's always a question of price, not who knew what first. But history tells a different story: when there is media noise about Teva, the company is usually doing nothing. When the media noise is squelched, Teva goes into action and surprises everyone with a major acquisition.
The capital market adage says, "Buy on rumor, sell on news"; but Teva adds a twist - "Listen to the rumors, and wait for the news". In any case, Teva is not one of the public companies that rises or falls dramatically every day, not even when it is carrying out a major acquisition.
Published by Globes [online], Israel business news - www.globes-online.com - on December 20, 2009
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