Hikma Pharmaceuticals acquires US labs in $2.25bn deal

London-listed pharmaceuticals firm Hikma on Tuesday bought US generic drugs company Roxane from German peer Boehringer Ingelheim for $2.65 billion (2.40 billion euros) in the sector’s latest rapid round of consolidation.

The Jordanian company, which makes and markets branded and non-branded generic and injectable drugs, said the Boehringer purchase would make it the sixth biggest provider of generic drugs in the United States.

Israel’s Teva Pharmaceutical Industries agreed on Monday to pay $40.5 billion for Allergan’s generic drugs business, solidifying Teva’s position as the world’s No. 1 maker of generics.

In addition to a gross cash consideration of $1.18 billion, it will issue 40 million new Hikma shares to Boehringer, representing about 16.71 percent of Hikma’s issued share capital immediately following closing and admission.

In recent years, Hikma has focused on expanding its position in the US, acquiring MSI in 2010 and Bedford Laboratories from Boehringer in 2014 to help it gain a strong foothold in the US generic injectables market.

Hikma has been looking to expand in the United States, which accounts for about half of sales. The generics division is its smallest, accounting for about 15 percent of revenue.

Closely held Boehringer Ingelheim said in January that it was exploring strategic options for Roxane Labs, after Bloomberg News reported that the company was working with Morgan Stanley on the process.

The deal was welcomed by Jefferies’ analyst James Vane-Tempest, who said in a note he expected “a positive share price reaction as the market has been waiting for a deal, for which Roxanne cements Hikma’s US ambitions.” It also agreed to make milestone payments of up to $125 million as part of the deal, which is expected to close in the fourth quarter this year.