Teva to acquire Cephalon for $6.8bn

The world's largest generic drug maker, Teva Pharmaceutical, has entered into an agreement to acquire all outstanding shares in global biopharmaceutical company Cephalon for $81.50 per share in cash, a total value of around $6.8bn.

The combined company will include a branded portfolio worth around $7bn in sales and includes a product pipeline of more than 30 late-stage compounds. The acquisition will position the combined venture as a leader in speciality pharma and will create a valuable business in niche therapy areas such as oncology, pain management, respiratory and central nervous system (CNS).

Shlomo Yanai, president and CEO of Teva said: "This is transforming for Teva's branded business, as it will help us to deliver on our strategic goal of creating a diversified, multi-faceted company. We have been following Cephalon for a long time and are very happy with the opportunity to join forces. Our significantly broader portfolio will permit marketing and sales synergies and enhance profitability."

"Cephalon's merger with Teva is the result of a rigorous process that included a review of a wide-range of strategic options undertaken by Cephalon's Board of Directors and management team to maximise value and deliver significant returns to shareholders," said Kevin Buchi, CEO of Cephalon.  

"By joining forces with Teva, we will benefit from their scale, worldwide reach and operational excellence, allowing us to further pursue our shared goals of delivering new, innovative therapies to help patients around the world," Buchi continued.

Teva will finance the transaction through cash on hand, lines of credit and the public debt market. The deal is expected to be completed during Q3 2011.