EU Commission puts conditions on Teva buy of Allergan Generics

The European Commission has approved under the EU Merger Regulation the proposed $40.5 billion acquisition of the generics business of Ireland-incorporated Allergan (NYSE: AGN) by Israel’s Teva Pharmaceutical Industries (NYSE: TEVA; The Pharma Letter July 27, 2015), subject to conditions. Both companies are among the top four generic pharmaceutical manufacturers worldwide, the EC noted.

The decision is conditional upon the divestment of a number of assets, including the great majority of Allergan Generics' business in the UK and Ireland. The Commission had concerns that the merged entity would have faced insufficient competition from the remaining players for a number of generic pharmaceuticals, as well as regarding the overall generics business in the UK, Ireland and Iceland. The commitments offered by the companies address these concerns.

Following a thorough market investigation, the Commission found that competition concerns arose for a number of marketed generic molecules and generic molecules in development pipeline in 24 EEA countries, due to horizontal overlaps or vertical relationships (related to out-licensing) between the parties. On the other hand, the Commission did not identify any competition concerns as regards vertical relationships resulting from the parties' offerings of active pharmaceutical ingredients.