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 www.tevapharm.com and 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 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, 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.
CONTACT:
Investors, Elana Holzman, +972-3-926-7554
elana.holzman@teva.co.il
Kevin Mannix, +1-215-591-8912,
kevin.mannix@tevausa.com
Media, Ayala Miller, +972-3-926-7262,
ayala.miller@teva.co.il
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
