Watson to pay $1.9B for Andrx

Watson Pharmaceuticals has agreed to fork over $1.9 billion to buy Andrx, furthering the rapid consolidation of the generic drug business. The deal--a 32 percent premium at $25 a share--makes Watson the third largest generic drug maker in the country. The pact follows a long string of generic drug deals involving the merger of such companies as Teva and Ivax and Novartis and Eon Labs. Analysts say that the generic drug business requires large scale manufacturing to provide the kind of volume needed to generate solid returns. Both Watson and Andrx also have branded drugs in their portfolios.

"Our acquisition of Andrx significantly supports our long-term goal of expanding our existing product portfolio and pipeline, while strengthening Watson's position in high value, specialized sustained-release technology," Watson said in a statement. "The combined revenue stream will fuel further product development and sales, while allowing Watson the flexibility and financial resources to continue building its brand and generic businesses through internal product development and product in-licensing."

- here's the report from TheStreet.com