Teva signs definitive agreement to acquire Taiyo

May 16 2011

Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) announced today that it has signed a definitive agreement to acquire 57% of the shares in privately-held Taiyo Pharmaceutical Industry Co. Ltd. for $460 million in cash paid to private shareholders. Teva will also extend an offer to purchase all remaining outstanding shares of Taiyo. This transaction gives Taiyo an enterprise value of $1.3 billion. The transaction is expected to be accretive to GAAP earnings within four quarters after closing.

Taiyo is the third largest generic pharmaceutical company in Japan with sales of $530 million in 2010. The company has one of the most comprehensive generic product portfolios in the Japanese market with over 550 generic drugs in a variety of therapeutic areas and dosage forms. Taiyo has strong presence in all major distribution channels in Japan, particularly in hospitals due to its wide range of injectable product offerings. Taiyo's marketing efforts are supported by a strong back-end with top tier production capabilities in a wide range of technologies (including sterile manufacturing) in two manufacturing facilities, as well as a strong R&D team and local regulatory expertise.

Commenting on today's transaction, Shlomo Yanai, Teva's President and Chief Executive Officer, said, "This acquisition will enable Teva to deliver on our strategic objective of becoming a leading player in the fast-growing Japanese generics market. In fact, we now expect to reach our 2015 target of $1 billion in sales in Japan ahead of schedule. Taiyo's strong market reach, cutting-edge production facilities, and impressively large product portfolio, combined with Teva's scale and capabilities as the world's largest generics company, will enable us to offer a much wider range of high quality, affordable generics to a much larger segment of the Japanese market."

Mr. Yanai continued, "We have great respect for Taiyo's legacy and its experienced, talented, and dedicated team and look forward to welcoming them into the Teva family."

Japan is the second largest pharmaceutical market in the world, valued at $96 billion in 2010 with a relatively low rate of generic penetration of 23%. The Japanese government has expressed its intention to increase generic penetration to 30% by 2012.

The transaction will be funded through a combination of cash on hand and bank debt.

Teva expects to complete the transaction by the end of the third quarter. The acquisition is subject to the approval of Taiyo's shareholder meeting and customary closing conditions.