Teva Pharmaceuticals (NASDAQ:TEVA) has inked a deal to buy a majority stake in Japanese generic drug maker Taiyo Pharmaceutical Industry for $460 million in cash.
Teva will acquire 57% of Japan’s third-largest generic pharmaceutical company and will extend an offer to purchase all remaining outstanding shares of Taiyo.
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The Japanese privately held company booked sales in 2010 of $530 million. The bid by Teva values the company at $1.3 billion.
“Taiyo’s strong market reach, cutting-edge production facilities, and impressively large product portfolio, combined with Teva’s scale and capabilities as the world’s largest generics company, will enable us to offer a much wider range of high quality, affordable generics to a much larger segment of the Japanese market,” Teva CEO Shlomo Yanai said in a statement.
Japan is the second largest pharmaceutical market in the world, valued at $96 billion in 2010 with a relatively low rate of generic penetration of 23%. The island nation’s government has expressed interest in increasing generic penetration to 30% by next year.
With the help of the deal, which is slated to close by the end of the third quarter pending customary closing conditions and Taiyo shareholder approval, Teva expects to reach ahead of schedule its 2015 Japanese sales target of $1 billion.