Jerusalem – The European Commission has approved Teva Pharmaceutical Industries Ltd.’s $40.5 billion acquisition of Allergan plc’s global generics business on condition that Teva divest several assets, including the majority of Allergan Generics’ business in the United Kingdom and Ireland.
The commission had been concerned that the merged company would have a negative impact on the overall generics business in the U.K., Ireland and Iceland, leaving insufficient competition for a number of generic pharmaceuticals. Those concerns were addressed in commitments offered by the companies, according to the EU.
In order to address those concerns, Teva agreed to divest of certain overlapping molecules in 24 European countries, other than the United Kingdom, Ireland and Iceland.
In the United Kingdom and Ireland, Teva will divest of a majority of the current Allergan Generic business and the divested unit will be capable of manufacturing and marketing generic medicines. The remainder of the Allergan Generics U.K. and Ireland business will be integrated into Teva’s operations.
In Iceland, Teva will divest of its generic business, while retaining the Allergan Generics business.
“Effective competition between generic pharmaceutical manufacturers is essential to drive down prices for patients and healthcare systems,” Margrethe Vestager, EU commissioner in charge of competition policy, said. “I am glad we have found a solution that allows this takeover to proceed, while ensuring that competition will continue in all European countries.”
Meanwhile, Teva announced it continues to work closely with the FTC to obtain the necessary regulatory approval in the U.S., where concerns also had been raised that a shrinking generic market could cause prices to rise.
“This transaction delivers on Teva’s strategic objectives in both generics and specialty,” Erez Vigodman, president and CEO of Teva, said when the deal was first announced last July. “Through our acquisition of Allergan Generics, we will establish a strong foundation for long-term, sustainable growth, anchored by leading generics capabilities and a world-class late-stage pipeline that will accelerate our ability to build an exceptional portfolio of products – both in generics and specialty as well as the intersection of the two. Our respective portfolios of generic medicines and applications are highly complementary.”
In an earlier deal valued in excess of $150 billion, Dublin-based Allergan in November agreed to merge with Pfizer Inc., creating the world’s largest drugmaker and shifting a top U.S. corporate names overseas.
Teva Pharmaceutical, headquartered in Israel, is the world’s largest generic medicines producer, producing a wide range of products. In specialty medicines, Teva has a position in treatments for disorders of the central nervous system, including pain, as well as a portfolio of respiratory products. The company’s net revenues in 2015 totaled $19.7 billion.