Actavis CEO: Teva-Mylan Deal to Create ‘Bad Blood’, Destroy Value

 
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As Israeli pharmaceutical giant Teva pushes ahead with a $40-billion dollar hostile bid for US generic drugmaker Mylan, Brent Saunders, CEO of rival drug manufacturer Actavis, has raised concerns about the merits of the deal.
 
Saunder’s told Bloomberg that the, “hostile takeover of global companies usually destroys value.” In his opinion hostile bids like the one being pursued by Teva creates ‘bad blood’ and adversely affects the assimilation of business operations. In his opinion, “[In long run] these deals depend on people, who are concerned with performance, continued business momentum, and discovering new drugs.”
 
Saunder’s did not rule out the possibility of his company joining the race by launching its own takeover bids to consolidate the pharmaceutical market. 
 
Earlier in April, Mylan rejected $40 billion takeover offer by Teva and launched a $32 billion hostile bid to acquire drugmaker Perrigo. The move, which Mylan claims would bring in $800 million in annual operating synergies, is also widely seen as the company’s attempt to ward off Teva’s takeover attempts.
 
If Teva succeeds in its takeover bid, the combined company would have an estimated 400 generic drugs in pipeline for approval. 
 
A Teva-Mylan merger could create a global pharmaceutical powerhouse. Teva has formally approached US-regulators to address antitrust issues.
 
Actavis CEO Saunders maintained that his company’s own recent acquisition of Allergan Inc., is a “compelling strategic fit” that has resulted in a “complimentary fit” and described it as a white knight move to save Allergan from another hostile bid.
Actavis raised is full-year guidance, citing Allergan’s contribution. Allergan’s drug business that includes high-profile branded drugs like Botox reportedly added $258 million to Actavis’ net revenue.
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