Teva Swoops In To Snatch Cephalon For $6.7 Billion
Cephalon, the mid-sized specialty pharma company has found a white knight. Just two weeks before a May 12 deadline required shareholders to tender their shares for or against a takeover offer by Valeant Pharmaceuticals International, the company has accepted a $6.8 billion cash offer from Teva Pharmaceutical Industries.
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In his first public comments to investors, CEO Erez Vigodman said he will consider large acquisitions to drive growth at Teva, while deepening cost cuts and refocusing on generics to maintain Teva’s leadership position.
Actavis’ proposal to buy Forest Labs for $25 billion in stock and cash was driven by consolidating customers and fierce competition in traditional Western markets. Different pressures, namely the tough-to-manage patent cliff, as well as leadership succession issues and investor unrest, drove Forest into the arms of a suitor.
A day after announcing the abrupt resignation of CEO Jeremy Levin, Teva’s management emphasized that the company’s current strategy would continue, including plans for dealing with ongoing pressures from Copaxone’s loss of exclusivity, and under-performance of the European generics businesses. Teva hoped to persuade rattled investors of its steady road to growth.