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FTC Clears Watson Merger

The company will close the purchase of Andrx this week.

Watson Pharmaceuticals

(WPI)

said Tuesday that it received permission from the Federal Trade Commission to buy fellow generic-drug maker

Andrx

(ADRX)

.

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Watson said it expects to close the deal Nov. 3. Andrx stockholders will receive $25 a share in the

$1.9 billion transaction.

The acquisition reflects the need of midsized

companies to expand their sales, at home or abroad. Otherwise, they risk being acquired or placed at a competitive disadvantage vs. larger generic-drug companies. The combination of Watson and Andrx will have sales of around $2.7 billion.

The FTC approval comes with a few conditions, which Watson said aren't significant. Watson must cancel an agreement with one company to market a painkiller, sell the rights to a generic diabetes treatment to another company and sell its oral contraceptives to a third company.

Watson announced the FTC's decision after markets had closed. In regular trading, Watson's stock closed at $26.91, up 36 cents, or 1.4%.