Watson buys Arrow for $1.75 b

Watson Pharmaceuticals Inc said on Wednesday that it will buy Arrow Group for $1.75 billion, clinching a long-expected deal by the US 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 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. Watson’s main rivals in the US market — Teva Pharmaceutical Industries, Mylan Inc and the Sandoz unit of Novartis — have been more substantial global players, due to their own deals.

The deal also may better position Watson in the market for generic biotechnology drugs, as Arrow owns 36 per cent of Eden Biodesign, which provides services to early stage biotechnology companies.