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Pharma Deals in Latin America Continue, Teva to Buy Rimsa

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Acquisitions are picking up pace in Latin America with Teva Pharmaceutical Industries Ltd.TEVA being the latest to announce an agreement in this region. Teva said that it will be acquiring Mexico-based pharmaceutical manufacturing and distribution company Representaciones e Investigaciones Médicas, S.A. de C.V. (Rimsa).

The acquisition will see Teva shelling out $2.3 billion and gaining a portfolio of products and companies, intellectual property, assets and pharmaceutical patents in Latin America and Europe. Although valuation looks a bit on the high side, media reports suggest that quite a few large healthcare companies were pursuing Rimsa.

The Rimsa acquisition, slated to close by early first quarter 2016, is expected to position Teva as a leading pharmaceutical company in Mexico, which is the second largest market in Latin America and one of the top five emerging markets across the world.

Several companies have been pursuing acquisition agreements in the Latin American markets - factors like an aging population, growing middle class, easier access to medical products as well as initiatives undertaken by governments to promote the use of cheaper generic medicines are expected to drive growth in these markets.

Rimsa's revenues, which came in at $227 million in 2014, have been growing at a pace of 10.6% since 2011. Teva expects the acquisition to be accretive from the first quarter of 2017.

The Rimsa acquisition is in line with Teva's efforts to strengthen its generics business as well as presence in emerging markets. Teva, which started facing generic competition for its key branded drug, Copaxone, earlier this year, has been looking to boost its revenues. The Rimsa deal comes just a few months after Teva announced that it will be acquiring Allergan's AGN generics business in a deal valued at $40.5 billion. Before that, Teva had been pursuing Mylan MYL .

Both Teva and Mylan are Zacks Rank #2 (Buy) stocks. Endo International plc ENDP , which acquired a Mexico-based company last year, is a better-ranked stock with a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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