Teva Bids $9 Billion For Rival Barr

Jerusalem-based Teva Pharmaceutical Industries, the world's largest generic drug company, has agreed to purchase Barr Pharmaceuticals of Montvale, N.J., the fourth largest generics firm, for $7.46 billion plus the assumption of approximately $1.5 billion in debt.

Expected to close later this year, the deal will create a company with pro forma sales of $11.9 billion and 37,000 employees operating in 60 countries. "The acquisition of Barr will elevate Teva's market leadership to a new level," Teva CEO Shlomo Yanai says. "It will enhance our market share and leadership position in the U.S. and key global markets."

Teva and Barr primarily are generics firms, but both also have proprietary drugs. Copaxone, an immunomodulator therapy for relapsing-remitting multiple sclerosis, represents more than 50% of Teva's U.S. sales. Barr's proprietary drug portfolio includes the contraceptives Seasonique and Plan B.

"The deal reflects growing opportunities in emerging markets," says Eric Snyder, an analyst with Mehta Partners. He notes that the acquisition follows Daiichi Sankyo's $4.6 billion bid for India's Ranbaxy Laboratories last month, and Barr's acquisition of Pliva, a Croatian generics firm, for $2.2 billion in 2006.

Meanwhile, the board of Prague-based generics firm Zentiva has recommended that shareholders not accept a $2.5 billion takeover offer from Sanofi-Aventis, claiming that it undervalues the company. Sanofi currently owns approximately a quarter of Zentiva.