WSJ : Teva to Buy Allergan Generics for $40.5 Billion

Teva to Buy Allergan Generics for $40.5 Billion

Deal puts Teva among biggest drug makers, enables it to drop bid for Mylan

Teva Pharmaceutical Industries Ltd. on Monday agreed to buy Allergan PLC’s generics unit for $40.5 billion in cash and stock, in a deal that will vault the Israeli company into the top ranks of global drug makers.

Teva said Allergan would receive $33.75 billion in cash and Teva shares valued at $6.75 billion, giving it a 10% stake in Teva.

The deal, the latest in a wave of consolidation in the drug industry in recent years, combines Teva, the world’s largest generic-drug company by sales, with the third-largest competitor in the market.

The acquisition will give Teva increased scale in the hotly competitive generic-drug market, and an opportunity to pursue further cost reductions that could help it cope with the end of a wave of big patent expirations.

“What we are doing here will enable Teva to be one of the winners of the ever-changing pharmaceutical industry,” Teva Chief Executive Erez Vigodman said in an interview. He expects Teva will be able to divest the products needed to satisfy any government concerns about antitrust.
Teva shares rose 13% in premarket trading.

Mr. Vigodman added that Teva would drop its pursuit of rival Mylan NV in wake of its agreement to buy Allergan’s generic-drugs business. “We believe we have an even greater opportunity to create value for shareholders from” the Allergan transaction, he said.

Teva said it plans to review its options with respect to the approximately 4.6% of Mylan stock that it owns.

Mylan, in a separate statement, congratulated Teva, said its focus remains unchanged and reaffirmed its commitment to acquiring rival Perrigo Co. So far, Perrigo has rebuffed Mylan’s takeover attempts.

Mylan shares fell 13% premarket, while Perrigo gained 3.9%.

For Allergan, the Teva deal provides it with cash to pay down debt and allows the company to focus more on lucrative brand-name drugs. Actavis was renamed Allergan earlier this year, after doing $100 billion in deals last year that gave it brand-name drugs, notably wrinkle fighter Botox.

Those deals had swollen Allergan’s debt levels, and the company has said it is committed to reducing its debt levels.

Allergan shares added 7%.

Teva said it expected the acquisition of Allergan Generics to contribute $2.7 billion in earnings before interest, taxes, depreciation and amortization, or Ebitda, in 2016, excluding synergies. It expects to achieve cost synergies and tax savings of approximately $1.4 billion annually, largely achievable by the third anniversary of the closing of the transaction.

Allergan’s 1,000 low-price products include branded generic drugs, over-the-counter medicines and generic versions of well-known pharmaceuticals such as the OxyContin pain treatment and Concerta, which treats attention-deficit-hyperactivity-disorder.

The deal is expected to attract antitrust scrutiny from regulators. Teva may need to sell off products with about $500 million in yearly sales to win approval, Evercore ISI analyst Umer Raffat estimates.

Teva said the transaction was unanimously approved by the boards of both companies and is expected to close in the first quarter of 2016.

Midsize companies such as Teva have largely driven the breakneck pace of consolidation in the drug industry in recent years—part of a broader boom in mergers and acquisitions—as they take advantage of cheap debt and in some cases low tax rates secured by relocating overseas, while drawing on the approval of investors who have driven their shares higher. Meanwhile, bigger, more-established rivals have largely been on the sidelines of major deal making.

Last year Teva, which had a market value of $60 billion before The Wall Street Journal reported Teva’s talks with Allergan on Saturday, had $9.1 billion in generic-drug sales, according to EvaluatePharma, about 12% of the world market. The company said it already accounts for one in six drug prescriptions in the U.S. But much of its business is in no-name generic medicines sold at lower prices. Nearly half of Teva’s $20.3 billion in sales last year were from the off-patent generic copies of drugs.

By adding Allergan’s business, which reported $6.6 billion in sales last year, Teva would have revenue significantly greater than that of better-known, branded-drug companies such as Cialis maker Eli Lilly & Co., which reported $19.6 billion in sales last year.

The deal could give the combined company a market value exceeding that of Lilly, which stood at $94 billion on Friday.

Teva also said Monday that it expected to report better-than-expected sales and earnings for the second quarter ended in June. The company projected earnings excluding certain items of $1.43 a share on revenue of $4.97 billion, down 2% from a year ago but up 6% excluding the impact from currency changes. Analysts, on average, were expecting earnings of $1.31 a share on sales of $4.92 billion, according to FactSet.

For 2015, Teva raised its per-share earnings forecast to a range of $5.15 to $5.40, from its previous range of $5.05 to $5.35. Analysts were expecting per-share earnings of $5.20, according to FactSet.

Dublin-based Allergan became one of the top 10 drug companies by sales this year when Actavis bought the maker of wrinkle treatment Botox for nearly $70 billion, and renamed itself. The Teva deal allows Allergan to sharpen its focus on its branded pharmaceutical business.


“We will have the potential to add scale in existing therapeutic areas, expand into new therapeutic areas and geographies and evaluate strategic transformational deals as we continue to build on our position as the most dynamic branded growth pharma company,” Allergan CEO Brent Saunders said.

In a sign of its continuing ambition, Allergan announced a deal on Sunday, saying it will pay $560 million upfront for Naurex Inc. and its antidepressant-drug candidate.

(BFW) Iran Says in Talks With Glencore on Oilfield Investment: Seda

Iran Says in Talks With Glencore on Oilfield Investment: Seda
2015-07-27 13:03:46.919 GMT


By Bruce Stanley
(Bloomberg) -- Amir-Hossein Zamaninia, Deputy Oil Minister
for Intl & Commercial Affairs, met w/ Glencore officials in
Switzerland, discussed possible investment in Iranian oil
fields, he says in interview w/ Iran’s Seda weekly magazine.

* Zamaninia doesn’t give date for talks, declines to identify
fields under discussion; Glencore officials recently visited
Iran, he says: Seda
* Iran oil ministry also in talks w/ Trafigura and since April
w/ officials from Poland, Austria, South Africa, Malaysia,
Croatia, Russia; talks aim at helping Persian Gulf country
regain oil sales lost under sanctions over its nuclear
program
* Zamaninia sees no difficulties selling additional 1m b/d of
oil after sanctions lifted; other OPEC members to make room
for this new 1m b/d, which won’t have much impact on prices
* Iran to pump additional 500k-600k b/d w/in 2 mos of lifting
of sanctions; will return to pre-sanctions output in 6 mos-1
yr after curbs removed
* Most of Iran’s cash in frozen accounts is in Japan, India,
China, S. Korea, some European countries; Greece owes Iran
$800m
* Iran can double natgas exports to Turkey but prices must be
negotiated


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

--With assistance from Ladane Nasseri in Tehran.

To contact the reporter on this story:
Bruce Stanley in Dubai at +971-4-364-1055 or
bstanley5@bloomberg.net
To contact the editors responsible for this story:
Nayla Razzouk at +971-4-3641056 or
nrazzouk2@bloomberg.net
Bruce Stanley, Rachel Graham

>>> FB US : Price Target raised to $110 from $94 at Cowen, reiterates Outperform

Price Target raised to $110 from $94 at Cowen, reiterates Outperform rating 
- Firm now expects total revenue CAGR of 27.1% vs. 25.6% prior driven by higher mobile and video advertisement estimates (following +ve checks during the quarter) and EBITDA CAGR of 29% vs. 27%, given high leverage from incremental advertising revenue
- Firm raises their 2015e EPS to $2.09 from $2.08 prior and raises 2020e to $7.19 from $6.58 prior, a 28% CAGR (vs. 26% prior)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: SOHU -6%, CYOU -3.7%, ROP -3.7%, RJET -3.4%, NSC -1.3%

M&A news: MYL -13.6% (TEVA withdraws bid for MYL), NEM -1.2% (divests stake in Valcambi Gold Refinery)

Select China related names showing weakness after Shanghai closed -8.5%: CMCM -10.5%, CNIT -9.1%, WBAI -8.8%, JKS -8.2%, SFUN -7.9%, JMEI -7.7%, YGE -7%, QIHU -6.4%, DL -6.1%, JD -5.6%, RENN -5.3%, DANG -4.8%, KNDI -4.7%, FENG -4.7%, SINA -4.7%, NQ -4.6%, AMCN -4.2%, BITA -4%, CTRP -3.8%, BIDU -3.2%, BABA -2.7%

Other news: BLRX -21.2% (confirms negative top-line results from Bellerophon's (BLPH) PRESERVATION I clinical trial for Bioabsorbable Cardiac Matrix), AMDA -8.1% (modest pullback following Friday's gains), GOLD -3.1% (provides Q2 update), FCAU -2.3% (reaches consensual resolution of NHTSA investigation on 23 recall campaigns), FCX -2.2% (likely in response to Chinese equity mkts)

Analyst comments: MTW -5.7% (downgraded to Sell from Neutral at Goldman ), SFXE -5.4% (downgraded to Hold from Buy at Stifel ), GRUB -4.5% (downgraded to Market Perform from Outperform at Cowen), NAV -3.8% (downgraded to Sell from Neutral at Goldman), RARE -3.2% (downgraded to Equal-Weight from Overweight at Morgan Stanley ), TEX -1.4% (ddowngraded to Sell from Neutral at Goldman), JAH -1.1% (removed from Franchise Pick List at Jefferies
)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: MGLN +8.3%, PHG +4.3%, QSR +2.5%, XCO +1.7%, HAE +0.7%

M&A news: XUE +48.4% (merges with Xiamen Insight Investment Co; whereby Insight will acquire Xueda stock for $5.50/ADS share in cash), TEVA +13.2% ( to acquire Allergan's (AGN) Generics business for $40.5 bln), BECN +8.5% (to acquire Roofing Supply Group from Clayton, Dubilier & Rice for $1.1 bln in cash and stock), AGN +6.6% (Teva (TEVA) to acquire Allergan's (AGN) Generics business for $40.5 bln), PRGO +4% (TEVA withdraws bid for MYL, paves way for MYL acq of PRGO), PLUG +1.7% (acquires HyPulsion from Air Liquide S.A (AIQUY) for $11.47 mln in stock)

Select metals/mining stocks trading higher: PAAS +3%, IAG +1.4%, TC +1.3%, CLF +1.2%, BHP +0.9%

Other news: MNOV +33.9% (FDA approval of the second phase 2 protocol for MN-001 in NASH which targets NASH patients with hypertriglyceridemia), TEVA +13.2% ( to acquire Allergan's (AGN) Generics business for $40.5 bln), AGN +6.6% (Teva (TEVA) to acquire Allergan's (AGN) Generics business for $40.5 bln), PRGO +4% (TEVA withdraws bid for MYL, paves way for MYL acq of PRGO), PSTI +3.9% (announces PLX Cells study results published in peer-reviewed scientific journal), SHPG +1.9% (still checking), SIG +1.6% (to join S&P 500), CTIC +1.6% (announced the appointment of Bruce J. Seeley as Executive Vice President and Chief Commercial Officer), RDHL +1.3% ( says that Salix Pharmaceuticals has confirmed it continues the development of RedHill's RHB-106 encapsulated bowel preparation)

Analyst comments: BOX +5.6% (upgraded to Overweight from Sector Weight at Keybanc/Pacific Crest), CAMT +4.2% (initiated with a Buy at Needham ), SSYS +3.3% (upgraded to Buy at Dougherty & Company), FTK +2.6% (upgraded to Perform from Underperform at Oppenheimer ), BIIB +1.3% (upgraded to Outperform from Mkt Perform at Bernstein), QCOM +0.7% (upgraded to Overweight from Equal-Weight at Morgan Stanley), AGCO +0.6% (upgraded to Neutral from Sell at Goldman)

>>> Faiveley (LEY FP) To Be Acquired by Wabtec for €100/shr in cash and stock; t

To Be Acquired by Wabtec for €100/shr in cash and stock; total deal valued around $1.8B 

Wabtec has made an irrevocable offer to the owners of approximately 51% of Faiveley Transports shares for a purchase price of €100 per share, payable 25% in cash and 75% in Wabtec preferred stock. The preferred stock will have a 1% annual dividend or, if greater, the dividend assuming full conversion into common shares, and must be converted after three years into Wabtec common shares at an implied ratio of one Faiveley Transport common share for 1.125 Wabtec common shares. Shareholders owning 51% of Faiveley Transport have entered into exclusive discussions with Wabtec. Upon completion of required labor group consultations, Wabtec expects that the 51% shareholders will enter into a definitive share purchase agreement and Faiveley Transport will enter into a transaction agreement with Wabtec.

Upon completing the share purchase, Wabtec will commence a tender offer for the remaining publicly traded Faiveley Transport shares. The public shareholders will have the option to elect to receive €100 per share or Wabtec preferred stock. The preferred stock portion of the consideration is subject to a cap of 75% of Faiveley Transports common shares. Wabtec intends to delist Faiveley Transport from Euronext after the tender offer if minority interests represent less than 5%. The total purchase price is about $1.8 billion, including assumed debt. Wabtec plans to fund the cash portion of the transaction with cash on hand, existing credit facilities and potentially other debt financing.

The strategic combination of Wabtec and Faiveley Transport will create one of the worlds largest public rail equipment companies, with revenues of about $4.5 billion and a presence in all key freight rail and passenger transit geographies worldwide. Wabtec expects to realize at least €40 million in annual pre-tax synergies from the combination, and the transaction is expected to be accretive to Wabtecs earnings per diluted share in 2016.

Albert J. Neupaver, Wabtecs executive chairman, said: Faiveley Transport is an excellent strategic fit, expanding our geographic presence considerably, broadening our product and service capabilities, and enhancing our technology and innovation initiatives, all of which will make us a more efficient global competitor. We are excited by the compelling opportunities and synergies created from the combination of two rail industry leaders with historic ties, a commitment to growth and efficiency, and a focus on technology, quality and customer service. We would be pleased to welcome the Faiveley family as a long-term Wabtec shareholder with representation on our Board of Directors.

Faiveley Transports headquarters in Gennevilliers, France will become Wabtecs global transit headquarters, under the Faiveley Transport brand name. Wabtec also intends to maintain the existing Faiveley Transport human resources policy in Europe for a period of at least 18 months after closing and to complement the companys existing Centers of Competencies for engineering and research and development, in line with Faiveley Transports 2018 Strategic Plan presented in May 2015.

WWD : Tod’s Partners With Net-a-porter for E-Commerce Ready-to-Wear Launch

LONDON — Net-a-porter.com has set its latest online retail exclusive, with the e-commerce site to carry Tod’s ready-to-wear collections exclusively online for two seasons.

Tod’s women’s fall collection will launch on Net-a-porter.com July 29, while the men’s line will launch on Mr Porter.com Sept. 8. Prior to the Net-a-porter partnership, Tod’s had sold its ready-to-wear collections exclusively in its own brick-and-mortar stores.

RELATED STORY: Tod’s RTW Fall 2015 >>

Net-a-porter.com’s partnership with Tod’s is the latest in a slew of online exclusives for the site.

In April, Net-a-porter launched Chanel’s Coco Crush fine jewelry line, marking Chanel’s first e-commerce project. A collaboration with Tom Ford followed, with the designer launching his women’s ready-to-wear on the site earlier this month, with Ford’s men’s designs to bow on Mr Porter in September. And last week, Net-a-porter launched an exclusive limited-edition capsule collection by Dolce & Gabbana, called Portofino.

Alongside an edit of Tod’s ready-to-wear collections, Net-a-porter and Mr Porter will carry a selection of footwear, bags, leather goods, luggage and accessories. Mr Porter has carried those Tod’s categories since fall 2012, and Net-a-porter since spring 2014.

“Since launching Tod’s accessories last year on Net-a-porter.com we have seen an overwhelming response from our global customers who love the refined, understated style that distinguishes the Tod’s brand,” said Sarah Rutson, vice president of global buying at Net-a-porter. “I am confident the response to the ready-to-wear will be equally as positive.”

Claudio Castiglioni, global general manager at Tod’s Group, added that Net-a-porter and Mr Porter’s “focus on quality, detail and…impeccable service…[are] very much in keeping with the Tod’s philosophy.”

“Net-a-porter and Mr Porter have a very particular eye toward quality and an excellent merchandise selection combined with a 360-degree approach to the market — they anticipate and develop new ways of shopping, [which] is exciting,” he said.