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Teva Pharmaceutical Industries Ltd. (TEVA) To Acquire Barr Pharmaceuticals Inc. (BRL)

In breaking news, two major pharmaceutical companies – Teva Pharmaceutical Industries and Barr Pharmaceuticals – announced that they have signed a definitive agreement under which Teva will acquire Barr for a total of $7.46 billion. In addition to the purchase of all shares of Barr stock at the price of $66.50 each, Teva will also assume $1.5 billion in net debt from Barr. Under the terms of the agreement, each share of Barr common stock will be converted into $39.90 in cash and 0.6272 Teva ADRs and is expected to close in late 2008.

The combined company will be the largest pharmaceutical company in the US, as combined total company revenues would have amounted to nearly $11.9 billion. Operations will now be responsible for the employment of more than 37,000 people worldwide. The acquisition should be a rather smooth process because of the complementary nature of the products and development pipelines of both companies. Another benefit of the acquisition will be the strengthening of Teva’s position in the key European market.

President and Chief Executive Officer of Teva, Shlomo Yanai, said, “The acquisition of Barr will elevate Teva’s market leadership to a new level. The combination of our two companies provides an outstanding opportunity strategically and economically: It will enhance our market share and leadership position in the U.S. and key global markets, further strengthen our portfolio and pipeline, and provide upside to our strategic plan, by allowing us to exceed our 20/20 goals for 2012.”

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