WASHINGTON (Reuters) - Teva Pharmaceutical (NYSE:TEVA) Industries Ltd (TA:TEVA) won U.S. antitrust approval to purchase Allergan (NYSE:AGN_pa) Plc's (N:AGN) generics business, after agreeing to divest 79 generic drugs to rival firms, the Federal Trade Commission said on Wednesday.
The $40.5 billion deal, which was announced in July 2015, solidifies Teva's position as the world's No. 1 maker of generics while freeing Allergan to focus on branded drugs.
Teva will sell rights and assets related to the 79 pharmaceutical products to 11 rival firms, marking the largest ever drug divestiture order in an FTC pharmaceutical merger case, the commission said in a statement.
Generics, drugs on which patents have expired and typically a source of healthcare savings, have made headlines over the past year as some drugmakers sharply raised prices on medications with few competitors.
“Millions of Americans rely daily on generic drugs to treat a wide range of illnesses,” Debbie Feinstein, director of the FTC’s Bureau of Competition, said in the statement.
“The FTC’s settlement safeguards the competitive availability of these medications for patients across the country who depend on them,” she added.
Products being sold include anesthetics, antibiotics, weight-loss drugs, oral contraceptives and treatments for a wide variety of diseases and conditions, the statement said.
The acquirers of the divested drugs are Mayne Pharma Group Ltd (AX:MYX), Impax Laboratories Inc (O:IPXL), Dr. Reddy’s Laboratories Ltd (N:RDY), Sagent Pharmaceuticals Inc (O:SGNT), Cipla Ltd (NS:CIPL), Zydus Worldwide, Mikah Pharma, Perrigo Pharma International (O:PRGO), Aurobindo Pharma (NS:ARBN), Prasco LLC and 3M Co (N:MMM), according to the FTC.
There has been an unprecedented wave of deals in the healthcare sector since early 2014, from large drugmakers buying up smaller rivals, to consolidation among makers of generic medicines and tie-ups between insurers.
Teva, which expects to close the transaction next week, said the combined company will have about 338 product registrations pending U.S. regulatory approval and will hold the leading position as the initial market entrant for around 115 pending U.S. generic drug applications.
Chief Executive Erez Vigodam said in a statement that the deal will generate $1.4 billion in operational and tax savings by the end of 2019 and raise adjusted earnings by 14 percent next year.