Replies to post #1517 on Teva Pharmaceutical Industries Ltd (TEVA)

[genisi]

I guess TEVA needs a pause to burp after the last acquisition...

Idit

[midastouch017]

Link translation:

IBI: Teva capable of buying Merck KGaA division
"A division such as that of Merck KGaA could be a growth engine for many years"
Adi Ben Israel 12 Mar 07 16:52
German pharmaceuticals company Merck KGaA (XETRA:MRK) will today receive non-binding offers for the purchase of its generic-drug division. According to reports, the minimum price is $5.3 billion, but the price could go as high as $6.5 billion. Several companies are interested in the acquisition, including Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), Mylan Laboratories Inc (NYSE:MYL), and Novartis AG (NYSE: NVS; LSE: NOV; SWX: NOVZ).
Investment house Poalim IBI Underwriting and Investments Ltd. (TASE:PIU) today published a updated survey, which discusses whether Teva is ready to buy Merck's generic division, following the major acquisitions of Sicor and Ivax in recent years, and the recent replacement of the company's CEO.

The report says that "We estimate that strategically speaking, for Teva, which sees itself as the world's largest generic drug company, it is important to take advantage of the unique opportunity to buy a company of this size. It seems unlikely that it will be able to carry out another acquisition of this size in the coming years. A division such as that of Merck KGaA could be a growth engine for many years".

The investment house is convinced that Teva is financially capable of acquiring the division, since it has $1.5 billion in its coffers, and its debt to shareholder's equity ratio is 0.88.

According to the analysts' estimates, Merck KGaA will be acquired by one of the generic-drugs companies, or by a private-equity fund. In the latter scenario, this would inspire confidence in the generic-drugs sector, obliging analysts to give it higher multiples.

The analysts say that if Teva were to buy Merck KGaA, it would be able to penetrate new markets, including Australia, Italy, Brazil, France and others. Likewise, Teva would be able to synergize its production and operations. The acquisition would also strengthen Teva in the field of respiratory products.

Published by Globes [online], Israel's business news - www.globes.co.il - on March 12, 2007