Teva readies for Allergan deal with bond sale

Billy Bambrough
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Teva's new 2016 forecasts now include Allergan generics revenues from 1 August (Source: Getty)

Israeli pharmaceutical firm Teva is set to raise around $22bn (£16.4bn) next week to fund its delayed acquisition of Allergan's generics unit.

The company filled documents with the US Securities and Exchange Commission saying it would hold meetings and calls with investors ahead of the multi-currency bond sale.

The calls and meetings are being arranged by Barclays, Bank of America Merrill Lynch, BNP Paribas, Credit Suisse, HSBC and Mizuho.

The deal has changed since it was first announced to excluded two generic drugs, Actonel and Carafate, and reduce the sale price, which was originally $40.5bn, by $221m.

The deal, first revealed in July 2015, was originally scheduled for completion in the first quarter of 2016.

The deal has already been postponed three times: from the first quarter to April, from April to June, and now to October this year.

It has dragged on as the two companies work to sell off assets to satisfy antitrust regulators. The US Federal Trade Commission is still yet to sign off on the deal.

Speaking yesterday on an analyst call to discuss the firm’s outlook through to 2019 Teva chief executive Erez Vigodman said he thought the deal would close soon.

“We expect the closing of the ... generics deal at any time now,” he said.

Vigodman also revealed that the big pharma firm’s new 2016 forecasts now include Allergan generics revenues from 1 August, highlighting his confidence that the deal with eventually go through.

The pharma industry is currently going though an merger and acquisition boom, though has slowed compared to last year.

Global pharmaceuticals-targeted M&A is down 66 per cent year-on-year at $22bn. The biggest pharmaceuticals deal in history, a planned $160bn (£113bn) merger of US company Pfizer and Allergan, was abandoned earlier this year as a result of a US government crackdown on so-called tax inversions aiming to prevent companies relocating to so-called tax havens.

The collapse of the blockbuster deal has stoked fears that last year’s M&A bonanza is coming to an end.

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