Watson Pharma Strikes First

Updated from 1:50 p.m. EST

Watson Pharmaceuticals (WPI Quote) made a $1.9 billion bid for Andrx (ADRX Quote) Monday, as the generic-drug industry continues to consolidate.

A combination of cutthroat pricing and acquisitions by the biggest members of the group is forcing midsized companies like Watson to get bigger or risk being taken over.

Still, the combination of Watson and Andrx, with estimated revenue of $2.7 billion a year, will be smaller than the industry leaders. Teva Pharmaceutical Industries (TEVA Quote) which recently acquired Ivax for $7.4 billion, and the Sandoz unit of Novartis (NVS Quote), which spent $8.3 billion last year to buy U.S. and German generic-drug companies, are both bigger. ...