Israel's Teva Pharmaceuticals, the biggest generic drug company in the world, in what became one of the world's worst-kept secrets this week is buying the American Barr Pharmaceuticals.
The price is $66.50 a share, which really isn't much a premium based on Thursday's closing price.
But it's a huge markup from where BRL'sstock was sitting earlier this week before the rumors and media reports started swirling about a deal being in the works.
Barr's Chairman and CEO Bruce Downey told me Teva's CEO Schlomo Yanai made the first move. But it didn't happen in a long-distance phone call from Tel Aviv to New Jersey. They say they were at an industry conference in Palm Beach outside some burger joint when the subject came up.
On the conference call this morning during the question and answer period, one analyst (I'd like to give him credit for his sense of humor, but I can't remember who it was and because I'm under deadline I don't have time to go back and listen to the replay) joked to Mr. Downey, "You got reimbursed for lunch in this deal." The CEO shot back, "And I can afford the next one, too."
I got to know Mr. Downey when he was fighting to win Food and Drug Administration approval of over-the-counter sales for the somewhat controversial Plan B or so-called "Morning After Pill". The social implications of its eventual behind-the-counter approval were much bigger than the financial implications for BRL.
But Mr. Downey maintained he personally believed the drug should be more easily accessible and that he was on a mission to make it happen. In the first quarter of this year, BRL took in nearly 600 million bucks. Less than a hundred million of that was from a number of proprietary products, which includes Plan B.
He also volunteered during his interview with me on CNBC this morning that during his tenure he'd been approached 12 times about doing a deal like this one. A dozen offers! Wow. Both Downey and Yanai said they think the generic drug sector will continue to consolidate. Among the American players still out there are Mylan Labs,Watson Pharmaceuticalsand King Pharmaceuticals, just to name a few.