Actionable news
All posts from Actionable news

Valeant and Teva Share Similar Ambitions With Similar Pitfalls

You want scale, you either build it yourself or you go out and acquire. But be careful what you wish for, as some deals can come back to bite you no matter how accretive they look.

We saw this recently with Valeant Pharmaceuticals International Ltd. (VRX) and Teva Pharmaceutical Industries Ltd. (TEVA) two very different, but at the same time very similar pharmaceutical companies that have recently found themselves in hot water.

Teva is reportedly ramping up its asset sales in an effort to preserve its credit rating and cut its massive debt load tied to its $40 billion, 2016 acquisition of Actavis Generics from Allergan plc (AGN) . Valeant meanwhile, recently said it would target more asset sales as it looks to cut $5 billion of its $27 billion in debt (debt that is tied to a host of acquisitions), a strategy that Wall Street firms are taking issue with.

Teva's Actavis buy occured when the generics industry was on a tear and Teva's stock was hovering...