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Israel’s Teva Pharmaceutical Industries will pay $40.5 billion in cash and stock for Allergan’s generic drugs business, solidifying Teva's position as the world's No. 1 maker of generics while freeing Allergan to focus on branded drugs, paying down debt and potential "transformational" acquisitions.
The deal, the largest in Israel's corporate history, allows Teva stronger economies of scale, crucial in the low-margin generic drugs business. Teva, which dropped its hostile pursuit of Mylan, will likely have to sell off some drugs to allay antitrust concerns.
"Allergan's business is more high-end (than Mylan). It's a more interesting business ... a profitable business and it's well managed," said Gilad Alper, an analyst at brokerage Excellence Nessuah.
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