Teva Said to Plan Up to $7 Billion Share Sale for Allergan

  • Drugmaker could also sell fewer new shares and raise debt
  • Four banks have been lined up to underwrite the sale

Teva Pharmaceutical Industries Ltd. is planning to raise as much as $7 billion by selling new stock this year to help fund its purchase of Allergan Plc’s generic drug business, according to people familiar with the matter.

Teva has lined up four banks to underwrite the share sale, which may be launched as soon as November, two of the people said, asking not to be identified as the information is private. The Israeli drugmaker may opt to sell a smaller amount of new shares to avoid diluting existing shareholders, and raise debt to make up the rest of the financing, the people said.

Teva ended its hostile bid for Mylan NV in July, instead agreeing to buy Allergan’s generic-drug business for $40.5 billion in cash and stock to bolster its position as the world’s largest maker of generic drugs. The company entered into a $33.75 billion bridge-financing facility with a group of 10 banks, including a senior unsecured loan of as much as $27 billion and about $6.75 billion in equity bridge financing.

Shares in Teva fell 4 percent in New York trading at 10:34 a.m. local time.

A surge in mergers and acquisitions activity globally has prompted companies to issue record amounts of debt to finance takeovers, with investor appetite buoyant amid near-zero interest rates. Anheuser-Busch InBev NV is planning to sell bonds worth as much as $55 billion to finance its $106 billion takeover of SABMiller Plc, people familiar with the matter said last week.

Teva is considering the sale of a portfolio of drugs in the Middle East that it acquired with the Allergan transaction as it seeks to gain antitrust approval, people familiar with the matter said Oct. 16.

Representatives for Teva declined to comment.

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