Watson set for Actavis deal

Watson Pharmaceuticals is reportedly in talks with Actavis to acquire the company in a deal worth in the region of $7 billion.

Various sources have claimed the two generic firms are in discussions regarding a deal which would see Watson increase its presence in Central and Eastern Europe.

Although neither company would comment on the reports, Paul Bisaro, Watson CEO, recently said if the right “generic-focused large transaction presented itself, it would help us expand our footprint globally”.

Swiss-based Actavis, which enjoyed turnover in 2011 of around €1.9bn, expects that figure to rise to approximately €2.10bn this year.

News agency Reuters first reported on the discussions between two generic firms. The Financial Times then quoted an individual with ‘knowledge of the talks’ who said that discussions had been ongoing for the past four months.

The Wall Street Journal claimed a source had commented that an agreement after Easter was likely, with Bloomberg adding a source informed them there were no other suitors at present.

Chris Schott, an analyst at JP Morgan, issued a research note which said a future takeover of Actavis “would give Watson the scale it needs to complete globally”.

“We see little in the way of antitrust hurdles to completing the deal as the companies’ European businesses have little overlap, and overlap with the companies’ US businesses appears manageable,” he said.

Watson saw sales increase by more than a quarter last year (29%) to $4.58 billion.