Mar 18 2010
Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) announced today that
it has entered into a definitive agreement to acquire ratiopharm,
Germany’s second largest generics producer and the sixth largest generic
drug company worldwide, for an enterprise value of €3.625 billion. The
transaction is subject to certain conditions including relevant
regulatory approvals. On a pro forma basis, the combined company would
have had 2009 revenues of $16.2 billion. Teva expects to complete the
transaction by year-end 2010.
Commenting on today's transaction, Shlomo Yanai, Teva’s President and
Chief Executive Officer, said: “This is an important acquisition for
Teva. This transaction is perfectly aligned with our long-term strategy
in which Europe is an important pillar and growth driver. ratiopharm
will provide us with the ideal platform to strengthen our leadership
position in key European markets, most notably in Germany, as well as
rapidly growing generic markets such as Spain, Italy and France."
The acquisition will position Teva as the leading generic pharmaceutical
company in Europe, increasing its European business from sales of
$3.3 billion in 2009 to joint pro forma sales of $5.2 billion.
ratiopharm's robust portfolio includes 500 molecules in over 10,000
presentation forms covering all major therapeutic areas marketed in 26
countries. ratiopharm also has valuable know-how in biosimilars,
consisting of a number of products in advanced stages of development and
a well-established sales and marketing team. ratiopharm reported
worldwide 2009 revenues of €1.6 billion. The combined entity will have
40,000 employees worldwide, of which 18,000 will be based in Europe. The
German headquarters site for the combined entity will be located in Ulm,
ratiopharm's current headquarters.
Following the acquisition, Teva will improve its market position in
Germany, the world’s second largest generic drug market valued at
approximately $8.8 billion (including sales to hospitals and OTC), to
become the number two player in this market. The combined entity will
have a strong European footprint, holding the leading market position in
10 European markets, including key markets such as the UK, Hungary,
Italy, Spain, Portugal and the Netherlands as well as a top three
ranking in 17 countries, including Germany, Poland, France and the Czech
Republic. In addition, the transaction will nearly double Teva’s sales
in Canada.
Mr. Yanai continued, "We are highly impressed by the team at ratiopharm
and thrilled to be joining forces with a company we have partnered with
in the past and have long respected. Teva and ratiopharm have similar
corporate cultures and share a strategic vision which makes this
combination a natural fit. Together, we will be able to realize the
vision of increasing patients’ access to safe, high-quality, affordable
medications even more quickly and deliver even more value to our
stakeholders across the globe."
Hans-Joachim Ziems, Managing Director of ratiopharm's pre-owner VEM
Holding and manager of the bidding process, said, "The successful
sale of ratiopharm is concluded today with the combination of two great
companies. We have emphasized from the beginning that the strategic
concept of the integration of ratiopharm into the acquiring company will
play a critical role in the decision in addition to the purchase price.
Now, we have succeeded in putting the company under the strategic
umbrella of Teva as a prosperous unit, while taking into account the
interests of the employees, of VEM and of the Merckle Group’s creditors."
Oliver Windholz, Chief Executive Officer of ratiopharm, said,
“For ratiopharm, Teva is a natural fit, with its international focus and
our shared generic vision. We are convinced that together we can gain
enormous growth potential in all markets. Being a part of the Teva
family will enable our management team and employees to continue to grow
our business and fully materialize the great talent we have at
ratiopharm.”
Ludwig Merckle, the representative of ratiopharm’s family owner
said, "The separation of ratiopharm is a painful step for us as the
founding family. Taking this as given, I am confident that this is a
good solution. Finding the best home for ratiopharm was a vital element
in this process. I believe that joining forces with the world's largest
generic company will enable ratiopharm to continue its path of growth
and success."
Upon completion of the acquisition, Teva expects synergies of at least
$400 million (€300 million), which should be fully realized within three
years. The transaction is expected to be earnings accretive within three
quarters after closing, based on earnings per share according to U.S.
GAAP reporting.
The transaction will be funded through a combination of cash on hand and
lines of credit.
Source Teva Pharmaceutical Industries Ltd.,