US generic drugs maker Watson Pharmaceuticals Inc (NYSE:WPI) said it had finalised the acquisition of Swiss-Icelandic peer Actavis Group.
The parties sealed the definitive agreement in April and received clearance by the European Commission in October. The merged company will trade under the Actavis name.
The transaction involves an upfront payment of EUR4.25bn (USD5.5bn) and the issue of up to 5.5m shares of the buyer’s common stock in 2013, valued at EUR250m, to be provided if Actavis fulfills certain performance targets this year. The cash portion was funded with term loan borrowings and the proceeds from the issue of senior unsecured notes.
Watson said the deal would immediately boost its non-GAAP earnings, before synergies, and allow it to rapidly pay down its debt. It still expects USD300m (EUR231.4m) in annual cost synergy savings from the acquisition within three years.
The enlarged entity, with pro forma combined revenues of over USD8bn, is seen as the world’s third largest generic pharmaceutical company with a staff of 17,000. It has operations in more than 60 countries and is the leading company in more than 33 markets including the US, UK, Canada, Australia, the Nordic countries and Russia, Watson said. Some 40% of its revenues are generated outside of the US. In addition, its portfolio includes over 750 molecules offered in more than 1,700 different combinations and dosage forms.