UPDATE 1-Teva to acquire Bentley Pharma for $360 mln

(Adds background, deal details, analyst, company comments, share prices)

By Bill Berkrot

NEW YORK, March 31 (Reuters) - Teva Pharmaceutical Industries Ltd (TEVA.O) said on Monday it agreed to acquire Bentley Pharmaceuticals Inc BNT.N for about $360 million, giving it a larger foothold in Spain's generic drugs market.

Teva said the deal will take place after the previously announced spin-off of Bentley's drug delivery business to its shareholders, leaving the Israel-based company with Bentley's generic operations.

Bentley makes and sells a portfolio of about 130 pharmaceutical products in various dosages and strengths. It operates primarily in Spain, but also sells generic drugs in other parts of the European Union, Teva said.

Bentley shareholders will receive about $15.02 per share, Teva said, about a 9 percent premium to Bentley's New York Stock Exchange closing price of $13.74 on Friday. Bentley shares were trading up more than 14 percent following the acquisition announcement.

The deal is expected to close in the third quarter of 2008 and add to Teva's earnings within 12 months of closing.

"The combination of Teva Spain and Bentley will provide us with a platform to capture a leading position in the fast-growing Spanish generic pharmaceutical market," Teva Chief Executive Shlomo Yanai said in a statement.

"Spain was identified as one of our target markets in the strategic review we conducted last year," he said.

The combined operation will rank seventh in Spain, analysts said.

"While we expect the impact in the near term to be negligible, we believe this deal offers Teva a solid footing in the Spanish market," JPMorgan analyst Adam Greene said in a research note, noting that generic penetration rates in Spain are lower than some of the larger European markets.

Wachovia Capital Markets analyst Michael Tong said the deal further reinforces Teva's potential to be "best in class" in generics.

"We continue to believe the potential growth of generic utilization in international markets represents a key growth driver for generic drug companies in the near to intermediate term," Tong said.

Teva shares were up 70 cents, or 1.5 percent to $46.71 on Nasdaq while Bentley shares were up $1.94, or 14.1 percent, to $15.68 on the New York Stock Exchange. (Additional reporting by Justin Grant; Editing by Mark Porter and David Holmes)