UPDATE: Teva confirms bid for Allergan generics business; drops hostile bid for Mylan

Confirming weekend rumors, Israeli generics giant Teva Pharmaceutical Industries (NYSE: TEVA) this morning confirmed that it has made a bid for the generics business of Ireland-incorporated Allergan (NYSE: AGN). Teva shares rose 9.85 to 26,300 shekels in domestic market trading this morning.

Teva said it has signed a definitive agreement to acquire Allergan Generics in a transaction valued at $40.5 billion. Upon closing, Allergan will receive $33.75 billion in cash and shares of Teva valued today at $6.75 billion, representing an estimated under 10% ownership stake in Teva, with the number of Teva shares determined based on Teva’s volume weighted average trading prices during the 15 days prior to the announcement and five days following the announcement. The weekend rumors suggested a transaction value of between $40 and $45 billion.

Will not pursue Mylan transaction “at this time”