Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) said today that Teva-KOWA Pharma Co., Ltd., its joint venture in Japan with KOWA Company, Ltd., has signed a definitive agreement to acquire a majority of the outstanding shares of Japanes generic pharmaceutical company Taisho Pharmaceutical Industries, Ltd.
Teva did not report the amount it will pay. Market sources estimate the amount to be not more than $100 million.
Taisho is a privately held company with revenues of over $130 million.
Under the terms of the agreement, Teva-KOWA Pharma will purchase at least 66.7% of Taisho's outstanding shares. The transaction is expected to close by the end of 2009.
Taisho manufactures and markets a portfolio of over 200 generic products to pharmacies, clinics, hospitals and wholesalers, through a well-established sales and marketing force. These efforts are supported by a finished dosage manufacturing facility and R&D capabilities.
Teva expects the acquisition to bolster its position in Japan's generic pharmaceuticals market. Teva CEO Shlomo Yanai said, "We are very pleased with this important step, which will serve as a springboard for Teva-KOWA's operations in Japan. Taisho will bring invaluable local expertise and know-how to support our growth plan in Japan."
Teva and KOWA formed their joint venture at the end of September 2008. Each owns half of the company. When the joint venture was formed, "Globes" asked Yanai why Teva decided to set up a new generic company, rather than acquiring an existing Japanese firm. Yanai told "Globes", "We thoroughly studied the Japanese market for a long time, and I visited Japan to examine things up close. We concluded that the best way to enter the Japanese market is through a strategic partnership with an important player. Later, we may also decide on other ways, including the ways you mentioned, but for now we decided on a strategic partnership."
According to IMS and the Japanese Generics Manufacturing Association, generic pharmaceuticals represented only 5.7% in value (approximately $4.6 billion) or 16.9% in volume in 2006. In 2007, Japan's Ministry of Finance announced a plan to double generic utilization to 30% by 2012.
Published by Globes [online], Israel business news - www.globes-online.com - on December 24, 2009
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