Teva agrees to buy Allergan's generic-drug unit for US$40.5b

London

ISRAELI drugmaker Teva Pharmaceuticals Industries Ltd has agreed to buy the generic-drug business of Allergan plc for about US$40.5 billion in cash and stock, and ended its hostile bid for Mylan NV.

Teva will pay US$33.75 billion in cash and US$6.75 billion worth of shares at Monday's price, or about 10 per cent of the enlarged company, the Petach Tikva, Israel-based company said in a statement. Teva surged as much as 11 per cent as trading resumed in Tel Aviv.

The deal bolsters Teva's position as the world's largest maker of generic drugs, and gives it greater negotiating power with governments and private-health insurers. It also allows the drugmaker to extricate itself from an increasingly antagonistic pursuit of Mylan, which is in the mids…