Significantly Strengthens Teva's Market Leadership Position in the U.S. and
in Key Global Markets
Acquisition Expected to Be Accretive in the Fourth Quarter after Closing
JERUSALEM and MONTVALE, N.J., July 18 /PRNewswire-FirstCall/ -- Teva
Pharmaceutical Industries Ltd. (Nasdaq: TEVA) and Barr Pharmaceuticals,
Inc. (NYSE: BRL) announced today that they have signed a definitive
agreement under which Teva will acquire Barr, the fourth largest generic
drug company worldwide. Under the terms of the agreement, each share of
Barr common stock will be converted into $39.90 in cash and 0.6272 Teva
ADRs. Based upon the unaffected NASDAQ closing price of Teva's ADRs on July
16, 2008, the indicated combined per share consideration for each
outstanding share of Barr common stock amounts to $66.50, or a total
consideration of $7.46 billion plus the assumption of net debt of
approximately $1.5 billion.
Teva expects the transaction to close in late 2008 and to become
accretive to GAAP earnings in the fourth quarter after closing. This
purchase price represents a premium of 32% to Barr's average daily closing
price on the New York Stock Exchange for the 52-week period ending on July
16, 2008, and 42% to the closing price on July 16, 2008.
This acquisition will further enhance Teva's leadership position in the
U.S. and will significantly strengthen its position in key European and
Central and Eastern European markets. On a pro forma basis, 2007 revenues
of the combined company would have been approximately $11.9 billion. The
combined company will have an unmatched global platform, operate directly
in more than 60 countries and employ approximately 37,000 people worldwide.
The companies' highly complementary product offerings and development
pipelines will extend Teva's generic and proprietary offerings for
customers globally. By adding development resources and breadth to Teva's
product portfolio and pipeline, particularly the Paragraph IV and first to
file opportunities, Teva will bring more products to market while
increasing access to affordable medicines. The transaction also bolsters
Teva's specialty pharmaceutical platform through the addition of Barr's
substantial women's health portfolio to Teva's respiratory franchise,
further enhancing Teva's balanced business model.
Shlomo Yanai, President and Chief Executive Officer of Teva, said, "The
acquisition of Barr will elevate Teva's market leadership to a new level.
The combination of our two companies provides an outstanding opportunity
strategically and economically: It will enhance our market share and
leadership position in the U.S. and key global markets, further strengthen
our portfolio and pipeline, and provide upside to our strategic plan, by
allowing us to exceed our 20/20 goals for 2012."
Mr. Yanai continued, "We have long admired Barr as a highly-focused
company with an excellent management team. This is a transaction in which
two great, strong companies are joining forces to capture an even greater
share of the growing opportunities in generics and deliver even more value
to our stakeholders."
Bruce Downey, Chairman and Chief Executive Officer of Barr, said, "This
transaction will enable Teva to capitalize on Barr's portfolio of unique
generic and proprietary products, benefit from our capabilities in
biologics, and expand its presence in important Central and Eastern
European markets. This agreement has the full support of Barr's Board of
Directors and senior management, and will benefit the shareholders,
customers and employees of Barr."
Key benefits of the transaction include:
-- Exceptional Fit Supporting Teva's Long-Term Strategy: The
transaction combines two industry-leading companies, further enhancing
Teva's lead in the U.S. and delivering increased scale and expanded
geographic footprint in key global growth markets.
-- Expanding the Breadth of the Product Portfolio and Pipeline: Teva
and Barr's product offerings are highly complementary, extending Teva's
product portfolio and pipeline into new and attractive product categories.
The combined company will have over 500 currently marketed products; more
than 200 ANDAs pending with the FDA with annual brand sales of greater than
$120 billion, including approximately 70 first to file Paragraph IV
challenges; and approximately 3,700 product registrations pending with
various regulatory authorities worldwide, primarily in Europe.
-- Strengthening Teva's Balanced Business Model: The transaction also
bolsters Teva's specialty pharmaceutical platform through the addition of
Barr's substantial women's health portfolio to Teva's respiratory
franchise, further enhancing and diversifying Teva's balanced business
model. Additionally, this transaction augments Teva's biologics
capabilities.
-- Compelling Value Consistent with Stated Acquisition Criteria: The
combination is expected to deliver significant revenue and cost synergies
based on numerous operational efficiencies, increased scale and geographic
scope. Teva anticipates the transaction will generate at least $300 million
in annual cost savings within 3 years and will continue to provide
additional cost savings well beyond 2011. The transaction is expected to be
accretive to GAAP earnings in the fourth quarter after closing. The
acquisition offers considerable value with a financial structure that
preserves Teva's strong balance sheet and flexibility.
-- Enhanced Growth and Profitability Provide Upside to 20/20 Strategic
Target: The Barr acquisition will enable us to exceed our 20/20 five-year
strategic plan, which was to double revenues by 2012 to $20 billion with
net income margins of at least 20 percent.
Transaction Terms:
Under the terms of the agreement, Teva will acquire 100% of the shares
of Barr for total cash and stock consideration of $7.46 billion. Each share
of Barr's common stock will be converted into $39.90 in cash and 0.6272
Teva ADRs. In addition, Teva will assume Barr's outstanding net debt of
approximately $1.5 billion. Teva intends to fund the cash portion of the
consideration by using its cash on hand and marketable securities and by
approaching the long-term debt market for the remaining balance.
Approvals and Timing:
The boards of directors of both companies have unanimously approved the
transaction. The acquisition is subject to approval by the stockholders of
Barr, antitrust notification and clearance statutes in North America and
Europe, as well as other customary conditions. The transaction is expected
to close in late 2008.
The Merger Agreement may be terminated under certain circumstances,
including if Barr's Board of Directors determines to accept an unsolicited
superior proposal prior to approval of the merger by Barr's stockholders.
If the merger agreement is terminated under certain circumstances, Barr
will be required to pay Teva a termination fee of $200 million.
Lehman Brothers acted as financial advisor to Teva in this transaction,
and Willkie Farr & Gallagher LLP provided external legal counsel for Teva.
Banc of America Securities LLC acted as financial advisor to Barr in this
transaction, and Simpson Thacher & Bartlett LLP provided external legal
counsel for Barr.
Conference Call
Teva and Barr will host a conference call to discuss the transaction
today at 08:30 AM EDT. The number to call from within the United States is
(800) 573-4752 or (617) 224-4324 Internationally and using the participant
code 49487796. The call will also be webcast and can be accessed through
the Companies' websites at http://www.tevapharm.com and http://www.barrlabs.com. A replay
of the conference call will be available from 10:30 AM Eastern time on July
18 through 11:59 PM Eastern time on July 25 and can be accessed by dialing
(888) 286-8010 in the United States or (617) 801-6888 Internationally and
using the passcode 33090437.
About Teva
Teva Pharmaceutical Industries Ltd., headquartered in Israel, is among
the top 20 pharmaceutical companies in the world and is the leading generic
pharmaceutical company. The company develops, manufactures and markets
generic and innovative pharmaceuticals and active pharmaceutical
ingredients. Over 80 percent of Teva's sales are in North America and
Western Europe.
About Barr
Barr Pharmaceuticals, Inc. is a global specialty pharmaceutical company
that operates in more than 30 countries worldwide and is engaged in the
development, manufacture and marketing of generic and proprietary
pharmaceuticals, biopharmaceuticals and active pharmaceutical ingredients.
A holding company, Barr operates through its principal subsidiaries: Barr
Laboratories, Inc., Duramed Pharmaceuticals, Inc. and PLIVA d.d. and its
subsidiaries. The Barr Group of companies markets more than 120 generic and
27 proprietary products in the U.S. and approximately 1,025 products
globally outside of the U.S. For more information, visit http://www.barrlabs.com.
Safe Harbor Statement under the U. S. Private Securities Litigation
Reform Act of 1995:
The statements, analyses and other information contained herein
relating to the proposed merger and anticipated synergies, savings and
financial and operating performance, including estimates for growth, trends
in each of Teva Pharmaceutical Industries Ltd.'s and Barr Pharmaceutical,
Inc.'s operations and financial results, the markets for Teva's and Barr's
products, the future development of Teva's and Barr's business, and the
contingencies and uncertainties to which Teva and Barr may be subject, as
well as other statements including words such as "anticipate," "believe,"
"plan," "estimate," "expect," "intend," "will," "should," "may" and other
similar expressions, are "forward-looking statements" under the Private
Securities Litigation Reform Act of 1995. Such statements a re made based
upon management's current expectations and beliefs concerning future events
and their potential effects on the company.
Actual results may differ materially from the results anticipated in
these forward-looking statements. Important factors that could cause or
contribute to such differences include whether and when the proposed
acquisition will be consummated and the terms of any conditions imposed in
connection with such closing, Teva's ability to rapidly integrate Barr's
operations and achieve expected synergies, diversion of management time on
merger-related issues, Teva and Barr's ability to accurately predict future
market conditions, potential liability for sales of generic products prior
to a final resolution of outstanding patent litigation, including that
relating to the generic versions of Allegra(R), Neurontin(R), Lotrel(R),
Famvir(R) and Protonix(R), Teva's and Barr's ability to successfully
develop and commercialize additional pharmaceutical products, the
introduction of competing generic equivalents, the extent to which Teva or
Barr may obtain U.S. market exclusivity for certain of their new generic
products and regulatory changes that may prevent Teva or Barr from
utilizing exclusivity periods, competition from brand-name companies that
are under increased pressure to counter generic products, or competitors
that seek to delay the introduction of generic products, the impact of
consolidation of our distributors and customers, the effects of competition
on our innovative products, especially Copaxone(R) sales, the impact of
pharmaceutical industry regulation and pending legislation that could
affect the pharmaceutical industry, the difficulty of predicting U.S. Food
and Drug Administration, European Medicines Agency and other regulatory
authority approvals, the regulatory environment and changes in the health
policies and structures of various countries, our ability to achieve
expected results though our innovative R&D efforts, Teva's ability to
successfully identify, consummate and integrate acquisitions (including the
pending acquisition of Bentley Pharmaceuticals, Inc.), potential exposure
to product liability claims to the extent not covered by insurance,
dependence on the effectiveness of our patents and other protections for
innovative products, significant operations worldwide that may be adversely
affected by terrorism, political or economical instability or major
hostilities, supply interruptions or delays that could result from the
complex manufacturing of our products and our global supply chain,
environmental risks, fluctuations in currency, exchange and interest rates,
and other factors that are discussed in Teva's Annual Report on Form 20-F,
Barr's Annual Report on Form 10-K and their other filings with the U.S.
Securities and Exchange Commission. Forward-looking statements speak only
as of the date on which they are made, and neither Teva nor Ivax undertakes
no obligation to update publicly or revise any forward- looking statement,
whether as a result of new information, future developments or otherwise.
This communication is being made in respect of the proposed merger
involving Teva and Barr. In connection with the proposed merger, Teva will
be filing a registration statement on Form F-4 containing a proxy
statement/prospectus for the stockholders of Barr, and Barr will be filing
a proxy statement for the stockholders of Barr, and each will be filing
other documents regarding the proposed transaction, with the SEC. Before
making any voting or investment decision, Barr's stockholders and investors
are urged to read the proxy statement/prospectus regarding the merger and
any other relevant documents carefully in their entirety when they become
available because they will contain important information about the
proposed transaction. Once filed, the registration statement containing the
proxy statement/prospectus and other documents will be available free of
charge at the SEC's website, http://www.sec.gov. You will also be able to obtain
the proxy statement/prospectus and other documents free of charge by
contacting Barr Investor Relations at 201-930-3720 or Teva Investor
Relations at 972-3-926-7554 / 215-591-8912.
Teva, Barr and their respective directors and executive officers and
other members of management and employees may be deemed to participate in
the solicitation of proxies in respect of the proposed transactions.
Information regarding Barr's directors and executive officers is available
in Barr's proxy statement for its 2007 annual meeting of stockholders,
which was filed with the SEC on May 15, 2008 and information regarding
Teva's directors and executive officers is available in Teva's Annual
Report on Form 20-F for the year ended December 31, 2007, which was filed
with the SEC on February 29, 2008. Additional information regarding the
interests of such potential participants will be included in the proxy
statement/prospectus and the other relevant documents filed with the SEC
when they become available.
SOURCE Barr Pharmaceuticals, Inc.
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Related links:
http://www.barrlabs.com
http://www.tevapharm.com
http://www.prnewswire.com/comp/089750.html /
CONTACT:
Investors, Elana Holzman, +972-3-926-7554,
elana.holzman@teva.co.il, or Kevin Mannix, +1-215-591-8912,
kevin.mannix@tevausa.com; Media, Ayala Miller, +972-3-926-7262,
ayala.miller@teva.co.il, or Denise Bradley, +1-215-591-8974,
denise.bradley@tevausa.com, all of Teva; Investors and Media,
Carol A. Cox of Barr, +1-201-930-3720, carol.cox@barrlabs.com
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