One of the side aspects of the pending Pfizer (PFE)-Allergan (AGN) deal, is that Pfizer will end up owning a 10 percent share in Israel-based Teva Pharmaceutical Industries Ltd. (TEVA)
In July, Teva acquired Allergan plc’s generic drug business for $40.5 billion. Under the terms of the deal, Allergan will receive $33.75 billion in cash and $6.75 billion in stock. That amounts to a 10 percent ownership stake, which will now be owned by Pfizer plc, once the deal is completed.
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The Teva-Allergan deal is expected to be completed in the first half of 2016. The Pfizer-Allergan deal is expected to be wrapped up in the second half of 2016. Prior to that, the largest Teva shareholder was Fidelity Management and Research (FMR), with 5.6 percent ownership.
Ian Read, chief executive officer of Pfizer, as part of the deal with Allergan, takes on the rights and obligations of the Allergan-Teva deal. Included in that is an agreement that bars the sale of Teva shares to Teva’s competitors and to activist shareholders for one year. This was put in place to protect Teva against a takeover attempt. “In addition, ” Shiri Habib-Valdhorn writes in Globes, “under the agreement as long as Allergan holds 5 percent or more of Teva’s shares, it is obligated to vote at shareholders meetings in accordance with the recommendations of the Teva board of directors, except in certain cases.”…
