Generic Giant Watson Pharmaceutical to Buy Rival Arrow for $1.75 Billion

09 July, 2009

Watson Pharmaceuticals, a maker of generic drugs, said Wednesday that it would buy the Arrow Group for $1.75 billion, clinching a long-expected deal to expand internationally.

Skip to next paragraph In Arrow, Watson will gain a generic drug maker that had $647 million in revenue last year, selling drugs in more than 20 countries, including Canada, France and Britain.

The combined company will have revenue of more than $3 billion. Watson expects the cash-and-stock deal to close in the second half of 2009 and increase earnings next year before any cost savings. Watson will pay $1.05 billion and issue about 16.9 million shares, worth $500 million. It will pay the remaining $200 million in preferred stock redeemable three years after the deal is completed.