Play a dirge for the passing of Watson Pharmaceuticals ($WPI)--but in name only. Now that its $5.5 billion Actavis merger is complete, Watson plans to take its former Swiss rival's moniker. The new Actavis will be the world's third-largest generics maker.
"This is the transaction that Watson needed to do to be significant and truly relevant on a global stage," CEO Paul Bisaro told Bloomberg.
And now that it's done, the company can sharpen its cost-cutting hatchet for $300 million in savings over the next three years. The cuts will include closing some of its 28 manufacturing plants. "As a result of accelerated integration planning, we will immediately begin to maximize the exceptional financial and commercial value of this combination," Bisaro said in a statement.
But cutting won't be Bisaro's primary task. He's intent upon building up a branded drug business to supplement lower-margin generics. "We will be focusing even more heavily on brand acquisitions and brand-licensing deals to diversify our business," he told the news service.
And growth is the very reason that Watson chose the name change. As Bloomberg points out, Actavis had strong brand ID in some markets where Watson intends to grow most. Russia, for instance, which is expected to be the company's fastest-growing market, Global Generics President Siggi Olafsson said. The name change takes effect next year.
- get the Watson release
- read the Bloomberg story
Special Report: Watson - Top 11 Fastest-Growing Generics Companies