Teva To Buy Barr Pharmaceuticals For $7.4 Billion

July 18, 2008 5:34 p.m. EST

Trenton, NJ (AHN) - The world's largest generic drugmaker, Teva Pharmaceutical, is about to get even bigger as the company will acquire Barr Pharmaceutical in a cash and stock deal worth roughly $7.4 billion.

Shareholders of Montvale, NJ-based Barr will receive $39.90 in cash and 0.6272 of Israel-based Teva American Depository Receipts for each share owned. The deal works out to roughly $66.50 a share, a premium of 15 percent from Thursday's closing price.

"This was the 12th attempt to acquire Barr, and the third by Teva," Barr's chief executive, Bruce Downey, told analysts during a conference call, according to the Associated Press "This is the right price, the right time and the right opportunity."

The companies said the deal is expected to close late this year and add to Teva's fourth quarter profits.

Teva said the combined companies will have roughly $12 billion in sales for the 500 products it offers.

Acquiring Barr increases Teva's exposure in the U.S generic drug market, which is expected to grow dramatically from 2008 to 2012 as drugs with $54 billion in sales are losing patent protection during that time horizon.

Shares of Teva and Barr Pharmaceutical both rose more than 4 percent on Friday.