Watson Pharma bid $1.9B for Andrx

Watson Pharmaceuticals says it has reached a definitive merger agreement to acquire all outstanding shares of common stock of fellow US firm Andrx Corp in an all-cash transaction for $25.00 per share, or a total price of approximately $1.9 billion. Andrx, whose capabilities complement those of Watson, is considered a leader in formulating difficult-to-replicate products and developing "best-in-class" drug delivery technologies, offering a unique portfolio of difficult-to-replicate generic products, says Watson.

The transaction will be financed with Watson cash reserves, as well as committed bank financing, net of cash acquired from Andrx. The deal is expected to be accretive to 2007 earnings with estimated 2007 revenues of $2.8 billion, based on historical revenues. Watson will become the third largest generic pharmaceutical company in the USA, based on prescriptions dispensed.

Watson also expects savings from synergies in the first year post-closing, largely from reduced selling, general and administrative expenses. The boards of both companies have approved the transaction. The consummation of the acquisition is subject to customary closing conditions, including approval of the transaction by Andrx stockholders and the receipt of applicable US regulatory approvals. The transaction is expected to close within six months.