Generic-drug maker to acquire Ivax

Tuesday, July 26, 2005 | 9:37 a.m.

Teva Pharmaceutical Industries, the No. 1 source of generic drugs in the United States, said Monday that it would acquire the Ivax Corp. for about $7.4 billion in a bid to become the world's largest maker of lower-cost drugs.

The deal will allow the companies to pool their resources at a time when mounting competition is forcing the industry to cut prices and provide a wider range of products. As copies of drugs formerly under patent, generics have become a commodity in the United States and elsewhere, and pharmaceutical companies must operate internationally, analysts said.

For Teva, based in Israel, and Ivax, based in Miami, the merger eliminates a large competitor and creates a supply chain that spans 50 countries. Last year, their combined revenues totaled about $6.6 billion.

George Barrett, president and chief executive of Teva North America, described the deal as "a statement about our commitment to the industry." As countries cope with rising health care costs, he said, they will increasingly turn to generic drugs to contain those costs. "We want to be in the best possible position to satisfy that market," he said.

Under the terms of the deal, Ivax shareholders will receive either eight-tenths of a U.S. depositary receipt representing Teva shares or $26 in cash.