TEVA to acquire IVAX for $7.4 billion

Jul 26 2005

TEVA Pharmaceutical Industries and IVAX Corporation have jointly announced that they have signed a definitive agreement providing for the acquisition of IVAX by TEVA.

Under the terms of the agreement, shares of IVAX common stock will, at the election of the shareholder, be converted into either $26 in cash or 0.8471 TEVA ADRs, subject to proration such that no more than one-half of such elections are for cash and no more than half are for TEVA ADRs. Based upon the NASDAQ average closing price of TEVA's ADRs in the 5 days up to and including July 22, 2005, the transaction has a total indicated purchase price of approximately $ 7.4 billion. As a result of the transaction, it is expected that IVAX shareholders will own approximately 15% of TEVA on a fully-diluted basis. The cash portion of the consideration will be funded using a combination of TEVA’s cash on hand and committed credit facilities. The boards of directors of both companies have unanimously approved the transaction.

Commenting on the transaction, Israel Makov, TEVA’s President and CEO, said: "This is a truly exciting day for TEVA. IVAX, like TEVA, has been a pioneer in its strategies for globalization and growth. Bringing our two companies together will vastly enhance our leadership position in the global generic industry. The combination of our two complementary businesses will allow TEVA to expand and strengthen our global generic and branded businesses with additional products, a deeper pipeline, and a wider presence in new therapeutic areas and growth markets.”

IVAX and TEVA are an exceptionally good match. In terms of geographies, IVAX brings a strong presence in Latin America and in Central and Eastern Europe, and complementary operations in North America and Europe. IVAX also brings complementary product lines in generics, a significant respiratory business, and a rich pipeline of generic and proprietary products in the areas of respiratory, CNS, and oncology. Based on the existing operations of TEVA and IVAX and assuming completion of the transaction, TEVA will generate sales of over $7 billion, it will operate directly in over 50 countries, and will employ approximately 25,000 people. The combined company will offer the widest range of cost-effective pharmaceuticals, both generic and branded, to consumers, customers, and healthcare providers.

Dr. Phillip Frost, IVAX’ Chairman and CEO said, “We have had longstanding business and personal relationships at TEVA, and have a strong sense of respect for the high ethical standards that have guided their sustained history of increasing shareholder value. We look forward with eagerness to the development of the new TEVA as a world-renowned leader in providing cost-effective medicines and innovative drugs to improve therapeutic outcomes."

Mr. Makov added: "The IVAX transaction significantly supports our long term strategy of profitable growth and global leadership. We believe that both companies share similar values and cultures, which I am confident will help us to create a smooth transition and ensure considerable synergies. We expect the transaction to become accretive within the first year.”

In conclusion, Mr. Makov said: "Today TEVA and IVAX have taken the bold step of consolidating to create what we believe will be the largest company in the generic industry, one which will generate real value for our shareholders, employees, and customers.”