Barr labs sold to Israeli firm for $7.5 billion

By Ray Reed

Published: July 18, 2008

“Business as usual” will continue the rest of this year at Barr Laboratories’ operation in Forest, company officials said Friday after announcing the drug maker was being sold to a larger company based in Israel.

Teva Pharmaceutical Industries said it signed an agreement to acquire Barr Pharmaceuticals’ operations in 30 countries for $7.46 billion. Barr said it expected the transaction to close late this year, and it has the full support of Barr’s board of directors.

Little specific information was available about what might happen with Barr’s operations or jobs in Forest, where it now employs 570 people.

Questions about future employment levels were met with Barr officials’ assurances that the Forest operation is a valuable part of the company’s assets.

“This is day one of a process that will be going on for the next few months” while the two companies are in transition to becoming one, said Charlie Mayr, a spokesman in Barr’s Montvale, N.J., headquarters.

Barr remains committed to completing $6 million of a plant expansion that’s in its first phase, said Bill Leach, vice president of Barr’s operation in Forest. That phase is expected to go into service in May 2009, he said.

When Barr officials announced the Forest expansion in January, they said its value would reach $62 million when all its phases were complete.

The outcome of the remaining $56 million in that venture will be in the hands of Teva, Barr officials said.

“It will be their company and they will be making the decisions,” Mayr said.

Carol Cox, also a Barr spokesperson in New Jersey, said “until the acquisition is finalized, it will be business as usual for the Forest operations.

“It is too early to determine what specific operations changes will result from the transaction,” Cox said.

Teva, with headquarters in Jerusalem, said “the transaction will generate at least $300 million in annual cost savings within three years.”

The announcement sent Barr stocks up 11 percent Friday in trading on the New York Stock Exchange. They closed at $63.46, near their all-time high of 67.18 reached in February 2006.

Teva stock rose 4.4 percent on the Nasdaq exchange to close at $42.87.

Teva said it was interested in Barr partly because the two companies’ product lines are “highly complimentary.”

It would strengthen Teva’s “specialty pharmaceutical platform through the addition of Barr’s substantial women’s health portfolio” to Teva’s line of respiratory products, the companies’ announcement said.

The Forest plant manufactures a significant part of Barr’s product portfolio, including cardiovascular, anti-infective, psychotherapeutic and other products, Cox said.

In addition, Barr’s national distribution facility for all products is in Forest, she said.

Barr is a holding company whose subsidiaries include Barr Laboratories Inc., Duramed Pharmaceuticals Inc., and PLIVA d.d.

Together the Barr companies market more than 120 generic and 27 proprietary products in the United States.