Israeli pharmaceutical giant Teva has agreed to purchase the global generics unit of the Ireland-based corporation Allergan PLC for $40.5 billion, the largest such acquisition in Israel’s history, The Times of Israel reported yesterday.

Teva will pay $33.75 billion in cash and offer $6.75 billion of its stock to Allergan, the company said, in a major move that will shake up the industry.

However, Teva said that it was withdrawing its offer of $40.1 billion for rival Mylan, a US-listed company that moved to the Netherlands a year ago for fiscal reasons. …

Generic drug companies are under pressure to do deals because there are fewer big-money drugs shifting to generic status compared with a few years ago, when cholesterol medication Lipitor and other blockbusters were available, experts say.

According to Reuters, Teva is currently the world’s largest generic drug manufacturer, while Allergan is the third-largest. The Tel Aviv Stock Exchange suspended trading on Teva’s stock this morning in anticipation of the announcement.

“What we are doing here will enable Teva to be one of the winners of the ever-changing pharmaceutical industry,” Teva CEO Erez Vigodman said in an interview.

According to the Times, Teva was founded in 1901 as an import business and started manufacturing drugs in the 1930’s.

Teva Pharmaceuticals is unrelated to the footwear brand Teva, owned by US-based Deckers Brands.

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