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The EC approved the merger on March 10, 2016 on the condition that Teva and Allergan divest certain assets in Europe.
The European Commission (EC) announced on March 10, 2016 that it has officially approved the acquisition of Allergan Generics by Teva. Both companies are among the top four generic-drug companies in the world, the EC explained in a press announcement. This raised several concerns for the regulatory organization, which said the merged company would “have faced insufficient competition from the remaining players for a number of generic pharmaceuticals.”
The EC approved the acquisition on the condition that the companies divested some assets. The companies agreed to the divestiture, which includes selling each of the marketed molecules in the development pipeline, Teva’s portfolio of marketed molecules, molecules in development in Iceland, the majority of Allergan Generics marketed generics activities, and generics in development in Ireland and the United Kingdom. In a press announcement about the decision, Teva said they agreed to divest overlapping molecules in a total of 24 European countries.
“Effective competition between generic pharmaceutical manufacturers is essential to drive down prices for patients and healthcare systems,” Margrethe Vestager, European commissioner for competition, said in a statement. “I am glad we have found a solution that allows takeover to proceed, while ensuring that competition will continue in all European countries.”
The companies announced the planned $40.5 billion deal in July 2015. According to the New York Times, the acquisition would assist in solidifying Teva’s position as the “biggest maker of off-brand treatments in the world.”
Although the acquisition has been approved in Europe, it is still subject to approval by regulatory agencies in the United States. Teva says that they plan to work closely with the Federal Trade Commission to obtain approval by US officials.