The US Federal Trade Commission (FTC) has approved Teva Pharmaceutical Industries’ proposed $40.5bn acquisition of Allergan’s generics business.
The approval was granted after Teva agreed to divest more than 75 generic drugs to eleven companies.
The divested products will include anesthetics, antibiotics, weight loss drugs, oral contraceptives, and treatments for several diseases and conditions.
The agreement, which the FTC says will help to preserve competition in the US pharmaceutical market, is the largest-ever drug divestiture ordered by the regulator in a pharmaceutical merger case.
FTC Bureau of Competition director Debbie Feinstein said: “Millions of Americans rely daily on generic drugs to treat a wide range of illnesses.
“The FTC’s settlement safeguards the competitive availability of these medications for patients across the country who depend on them.”
Upon completion of the transaction, Teva will have about 338 product registrations pending approval from the US Food and Drug Administration.
The company will hold the leading position in first-to-file opportunities with 115 pending applications in the US.
Teva will also have a commercial presence across 80 markets. The company estimates the deal to achieve $1.4bn in operational and tax synergies by the end of 2019.
The combined company is estimated to generate over $25bn of free cash flow from the time the transaction closes to the end of 2019.
Teva president and CEO Erez Vigodman said: “This acquisition is a transformative step for Teva as we continue to claim a differentiated space in the global pharmaceutical industry.
“The generics industry is one of the most attractive industries in the world in terms of growth rates, profitability, return to investors and contribution to healthcare systems and societies around the world.”
Image: Teva in Markham, Ontario. Photo: courtesy of Raysonho @ Open Grid Scheduler / Grid Engine.