Teva Pharmaceutical Industries Ltd has agreed to buy rival Ivax Corp for $7.4 billion in a deal that vaults the Israeli firm back to the position as world's biggest maker of generic drugs. Teva said on Monday it would buy Ivax for $26 a share, or 0.8471 in Teva American depository receipts, under the stock-and-cash deal, which highlights the rapid pace of consolidation in the market for generic, or unpatented, drugs.
The cash portion will be funded using Teva's cash and committed credit facilities. As a result of the deal, which is expected to close in late 2005 or early 2006, Ivax shareholders will own 15 percent of Teva on a fully diluted basis.
This will be the largest acquisition ever by an Israeli company. Teva, Israel's biggest publicly traded company, has a market capitalisation of nearly $20 billion while Ivax's market value is $6 billion.
The two companies combined would have sales of over $7 billion and employ 25,000 people.
"Bringing our two companies together will vastly enhance our leadership position in the global generic industry," Teva President and Chief Executive Israel Makov said in a statement.