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UPDATE 1-Watson to buy Arrow for $1.75 bln

Published 06/17/2009, 07:58 AM
Updated 06/17/2009, 08:01 AM

* Deal creates generic drugmaker with $3 bln in rev

* Arrow sells drugs in more than 20 countries

* Deal to boost earnings in 2010

* Watson shares off 4.6 pct in premarket

NEW YORK, June 17 (Reuters) - Watson Pharmaceuticals Inc said on Wednesday it will buy privately held Arrow Group for $1.75 billion, clinching a long-expected deal by the U.S. generic drugmaker to expand internationally.

In acquiring Arrow, Watson will gain a generic drugmaker with $647 million in revenue last year, selling drugs in more than 20 countries, including Canada, France and Britain.

The combined company will have combined revenue of more than $3 billion. Watson expects the cash and stock deal to close the second half of 2009 and boost earnings next year before any cost savings.

Under CEO Paul Bisaro, Watson has made no secret of its desire to make an acquisition that would allow it to sell its products internationally and better compete in the increasingly global generic drug industry.

The deal also may better position Watson in the burgeoning market for generic biotechnology drugs, as Arrow owns 36 percent of Eden Biodesign, which provides services to early stage biotechnology companies. (Reporting by Lewis Krauskopf; Editing by Derek Caney)

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