IVAX And Bergen Brunswick To Merge

US drug distributor Bergen Brunswick and generics drugmaker IVAX have entered into a definitive merger agreement. The new firm, to be known as BBI Healthcare Corp, merges the financial strength and the nationwide health care distribution network of BB with the broad product portfolio, promising pipeline and manufacturing capabilities of IVAX, according to a BB statement.

Under the deal, BBI Healthcare will acquire both Bergen Brunswick and IVAX through an exchange of common stock. IVAX shareholders will receive 0.42 shares in BBI for each IVAX common stock owned. BB shareholders will get 1.0 share of BBI stock for each BB share held. After the merger, BB and IVAX shareholders will hold around 44% and 56% respectively of BBI stock.

Analysts' Views Any IVAX-BB merger, the announcement of which came as a surprise to all, will not happen before February, March or April next year, and while IVAX will be bigger and stronger, David Saks of Gruntal told the Marketletter that in the meantime it will have to deal with greater-than-anticipated losses. He feels the pricing has also come as a surprise (too low) to those who, if any, expected a merger. On balance, he feels the deal is attractive in the long run because it creates "a leaner, richer, more powerful company in market share and product offerings."