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Impax Laboratories seen lower as generics merger is unveiled

Last updated: 09:13 17 Oct 2017 EDT, First published: 04:13 17 Oct 2017 EDT

deal, handshake
Impax will own 25% of the merged group

Impax Laboratories Inc (NASDAQ:IPXL) shares are on the back foot on Tuesday as it was revealed that the company had agreed to merge with Amneal Pharmaceuticals in a deal that will create a new major generic drugs player.

Together, the combined business will be the fifth largest US generics group.

Synergies over three years

Impax will own 25% of the enlarged group, whereas the holders of Amneal’s privately owned shares will own the other 75%. The deal will be supported by an equity placing with TPG and Fidelity Management distributing 46.8mln new shares priced at US$18.25.

It is expected that the deal will deliver US$200mln of synergies over three years following the merger, the company said in a statement.

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