Teva Pharmaceutical Industries
agreed to acquire
in a $7.4 billion transaction that will combine two makers of generic drugs.
Ivax shareholders will have the right to receive either $26 in cash or 0.8471 Teva American depositary shares. As a result of the transaction, Ivax holders will own about 15% of Teva on a fully diluted basis.
Shares of Ivax closed Friday at $22.88, but were climbing $2.57, or 11%, to $25.45 in premarket trading Monday. Teva is offering what amounts to a roughly 14% premium over Ivax's last closing price. Ivax, which is based in Miami, has a 52-week range of $12.36 to $23.74.
Teva's ADRs were down 31 cents to $30.85 in trading before the opening bell.
The cash portion of the deal will be funded using a combination of Teva's cash on hand and credit facilities. The boards of both companies have approved the transaction.
Based on the existing operations of the companies, Teva said it should generate sales of more than $7 billion, operate directly in over 50 countries and employ about 25,000 people. The combined company will offer generic and branded pharmaceuticals.
Ivax will become a unit of Israel's Teva, and the companies expect to close the transaction in late 2005 or early 2006.