| FRANKFURT, April 11
FRANKFURT, April 11 Watson Pharmaceuticals Inc
is on track to announce a deal to buy Actavis for around
$6 billion by the end of April, creating one of the world's
biggest producers of generic drugs, sources familiar with the
matter said on Wednesday.
While negotiations are complex, there are no major hurdles
in sight that would stop the two sides from reaching agreement,
two people briefed on the situation said.
Reuters first reported on March 21 that Watson was close to
buying Actavis, an unlisted Swiss-based firm, in a potential
5.0-5.5 billion euros ($6.5-7.2 billion) deal.
Since then some sources have said the price may be nearer 4.5
The prospect of such a deal has been welcomed by Watson
investors, who believe it would help the U.S. group to compete
more effectively against rivals like Teva Pharmaceutical
Industries Ltd and Novartis AG unit Sandoz.
The deal would also get Deutsche Bank AG out of a
hole, since the German bank was left holding billions of euros
of Actavis debt after a leveraged buyout in 2007 by Icelandic
tycoon Bjorgolfur Thor Bjorgolfsson.
Watson, Actavis and Deutsche Bank have all declined to
comment on the talks.
The generics sector has seen a wave of M&A in recent years
because Western governments are putting pressure on the industry
to provide drugs at the lowest possible price, which favours
large players who can produce at low costs.
Targeting Actavis is a bold move for Watson, whose previous
acquisitions include the $1.75 billion purchase of Arrow Group
in 2009, which established a foothold for the company in Europe,
and the $1.9 billion purchase of Andrx Corp in 2006.
The purchase of Actavis would be far larger but could be
made to work since there would be scope for significant
synergies, including the possible closure of some manufacturing
capacity in the United States.