Watson Pharmaceuticals/Actavis

Target: Actavis
Buyer: Watson Pharmaceuticals (now Actavis)
Price: $5.9 billion
Closed: Oct. 31, 2012

With its $5.9 billion buyout of Iceland's Actavis, Watson Pharmaceuticals said it would play a significant role on the global stage. The deal made it the third-largest generics manufacturer, behind Teva Pharmaceutical Industries ($TEVA) and the Sandoz unit of Novartis ($NVS). But CEO Paul Bisaro is also taking a cue from Teva and plans to move more deeply into higher-margin branded drugs.

It started by taking the Actavis name, a moniker that has more pharma panache than the more generic Watson. The Actavis brand is also well established in some markets, like Russia, where the company expects to generate its fastest growth. It won't all be about brands. Watson is expected to do well in biosimilars as well.

To get what it wanted, it also had to give up some products. The FTC is making it shed 18 products, with Par Pharmaceutical agreeing to buy manufacturing and marketing rights to 14 current and pipeline products--including a generic of Shire's ($SHPG) ADHD drug Adderall XR. Archrival Sandoz took the other four. The company will help pay for the deal, and future acquisitions, by cutting costs, starting by consolidating some of the 28 manufacturing plants it now has. Bisaro estimates that in three years, he can lop off $300 million in annual costs.

Watson Pharmaceuticals/Actavis
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