Watson Said to Be in Talks to Buy Swiss Drugmaker Actavis

Watson Pharmaceuticals Inc. (WPI) is nearing an agreement to purchase Swiss drugmaker Actavis Group hf, creating one of the world’s largest producers of generic drugs, according to people familiar with the process.

Watson, based in Parsippany, New Jersey, may pay about 4.5 billion euros ($6 billion) for Actavis, two of the people said, declining to be identified because the talks are private. While a deal may be announced as soon as next week, it is more likely to come after Easter, the people said.

Proceeds from a sale would allow Deutsche Bank AG (DBK) to recover money it loaned to Icelandic billionaire Bjorgolfur Thor Bjorgolfsson to acquire the company in 2007. Actavis refinanced its debt in 2010 and Frankfurt-based Deutsche Bank posted an impairment of 407 million euros related to the drugmaker last year.

Mylan Inc. also approached Actavis, based in Zug, but hasn’t made a formal bid, a person familiar with the situation said. The complexity of Actavis’s businesses, which were cobbled together through a series of acquisitions, has been holding back other companies from making competing bids, the person said.

Bjorgolfsson spent more than $1.8 billion on takeovers to build the company, formerly based in Iceland, into a competitor in the global generic-drug market. Deutsche Bank and Bjorgolfsson wouldn’t settle for less than 4 billion euros, one person said.

Actavis’s sales rose 9 percent last year to almost 1.9 billion euros, a spokesman said in an e-mail. The company makes generic versions of the attention-deficit treatment Ritalin and the sedative Ambien, among other products.

Spokesmen for Mylan, Actavis and Watson declined to comment on the sale process.

To contact the reporters on this story: Naomi Kresge in Berlin at nkresge@bloomberg.net; Albertina Torsoli in Paris at atorsoli@bloomberg.net; Matthew Campbell in London at mcampbell39@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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