DEAL REPORTER
Actavis (NYSE:ACT), the pharmaceutical giant which just closed on its USD 70.5bn deal to buy Allergan, is unlikely to jump into the takeover battle involving Teva Pharmaceuticals (NYSE:TEVA), Mylan (NYSE:MYL) and Perrigo (NASDAQ:PRGO), CEO Brent Saunders said.
Saunders, speaking on the sidelines of the UBS Global Healthcare Conference in New York on Monday, said that while Actavis expects to be an active participant in consolidation in the global pharma industry in coming years, the company is not interested in getting involved in hostile situations.
“We don’t do hostile deals so someone would have to invite us in. Perrigo doesn’t seem like they want to sell and Mylan doesn’t seem like they want to sell, but if someone calls us, we will always take a look,” Saunders said.
Saunders’ remarks come amid a spate of expected and actual acquisition moves in the global pharmaceutical industry, including Mylan’s hostile approach to Perrigo, followed by Teva’s hostile bid for Mylan. The moves drew speculation that Perrigo in particular may seek a “white knight” friendly bidder such as Actavis to fend off Mylan’s approach.
Saunders told investors in a Q&A presentation that he expects the approximately 30 pharma companies with global revenues above USD 5bn to consolidate to about 10 in the next five years or so. He said the company “will always be looking” for assets both large and small to add to its portfolio.
Even though Actavis’ long-term debt ballooned to USD 43.6bn from USD 15.7bn following the cash-and-share offer for Allergan, Saunders said the company is still capable of doing ‘transformational’ deals using equity or other means to pay for large purchases.
“We are committed to an investment grade credit rating, but that doesn’t forgo us from using equity or other things to do transformational deals,” Saunders said in an interview.