Companies Change Hands in Fantasyland by The Other Katherine Harris

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The Other Katherine Harris

by The Other Katherine Harris
Featured writer
Dandelion Salad

The Other Katherine Harris’s blog
July 19, 2008

An intended corporate buyout in the billions has been announced with utterly no reference to where either firm is based.  For all we’re told, both parties to the deal are extra-cartological — off in Terra Incognita or “Here Be Dragons” land.

Simple case of sloppy journalism, one might think — except that the source was The New York Times, citing Reuters.  The story informs us that a giant pharmaceutical company called Teva purchased one of its rivals, Barr, for $7.46 billion in cash and stock — representing $66.50 a share, a generous 42 percent premium over Barr’s closing price at mid-week.  The author also bothers mentioning “a wave of consolidation in the generic-drug sector that some analysts suspect will result in only a handful of major global players” and says that Teva – already world leader in generics — will now command a staff of 37,000 and operate in more than 60 countries, gaining the foothold in Eastern Europe that Barr acquired in 2006 with the Croatian firm Pliva.  (Presumably, the location of a company was still regarded as newsworthy two years ago.)

Now, however, we have to click the right links for investment information to learn that Teva’s home base is in Israel and Barr’s in the USA.  Thus we can determine that the most likely immediate cuts to that staff of 37,000 will be in Woodcliff Lake, New Jersey.

With a little further sleuthing, we can determine who’s to blame for this extraordinary omission.  It wasn’t Reuters. THEIR STORY is greatly detailed and raises the possibility of other suitors vying for Barr, as well as the issue of anti-trust risk (although unnamed “analysts” deemed both chances remote).

Interestingly, Reuters points out that Teva has bought three other US drug companies in the past two years: Ivax (for $7.4 billion), CoGenesys (for $400 million) and Bentley (for $360 million).

Had The Times put forward more complete information, perhaps the idea of anti-trust action wouldn’t be such a non-starter.  Could this be why they don’t even state in passing that yet another American company is slated to bite the dust?

Beyond the fact that it’s high time for the leaders of governments to climb out of the pockets of transnational grillionaires and protect their citizens’ livelihoods, imagine what will happen to generic drug pricing, if only a few firms soon control them all.