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Apr 26, 2012

Watson to Buy Actavis for $5.6B, Creating Generics Firm with $8B Pro Forma Revenues

  • Watson Pharmaceuticals will buy Switzerland-based Actavis for €4.25 billion (about $5.61 billion) to generate what it claims will be the world’s third-largest generics firm with estimated 2012 pro forma revenues of some $8 billion. Activis’ shareholders could receive an additional 5.5 million shares (valued at about €250 million [~$330 million] based on a $60 per share price), dependent on the firm achieving certain performance targets in 2012.

    With a commercial presence in 40 countries, privately held Actavis generated revenues of $2.5 billion in 2011, markets over 1,000 products globally, and has another 300 or so products in its development pipeline. Watson says acquisition of the company is expected to boost the proportion of its revenues generated in international markets from 16% of total generics revenues to about 40%. The firm also expects to achieve $300 million a year cost savings within the first three years post acquisition.

    “Actavis dramatically enhances our commercial position on a global basis and brings complementary products and capabilities in the U.S.," comments Paul M. Bisaro, Watson’s president and CEO. “With this transaction, we more than double Watson’s international access and strengthen our commercial position in key established European markets as well as exciting emerging growth markets, including Central and Eastern Europe and Russia.”

    Watson reported net global revenues of $1.5 billion in Q4 2011 (to December 31), up 62% on equivalent 2010 figures, and net global revenues of $4.6 billion in calendar year 2011, up 29% on 2010. 

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