Teva, the world's largest producer of generic medications, has been all over the news recently after announcing that it has entered into a deal to purchase the generic arm of Allergen. However, we're starting to see that the $40 billion acquisition itself isn't the biggest piece of news. As a matter of fact, investors are starting to look to the companies financing abilities as a sign of strength; and for good reason. Today, we'll talk about how Teva plans to finance the acquisition of Allergan generics, why investors see this as a sign of strength, what we can expect to see moving forward and how binary options traders can profit from the trends!
Teva Pharmaceuticals Financing Details
As mentioned above, Teva announced earlier this week that it has entered into an agreement to acquire the generic arm of Allergan. The deal is expected to close with a value of approximately $40 billion. So, naturally, Teva has been working to secure financing for the close of the deal; and on Friday, they announced that they have done just that. The company announced that it has secured $33.75 billion for the purchase of Allergan generics. The financing deal was made through a mix of lenders; including Bank of America, Barclays Bank, BNP Paribas, Citi, Credit Suisse, HSBC, Mizuho Bank, RBC Capital, and Sumitomo Mitsui Banking Corp. The remainder of the cost of the deal following the $33.75 billion financing will be paid through the company's free cash flow.
Why This Is A Big Sign Of Strength For Investors
If you've ever tried to finance a car, house, RV, or any other large purchase, you know that in many cases, it can be difficult to get a bank to fork over the funds; even though these purchases are minimal compared to the $33.75 billion in financing that Teva has secured. In order to get financing, the applicant must prove income, credit worthiness and more to ensure the bank that they will get their money back. With that said, in order to secure such a large amount of financing, Teva Pharmaceutical Industries had to ensure the bank that they would be able to pay the money from one of the largest financing deals in the history of biotechnology back! By doing so, they show that they have the strength and security that's likely to lead to growth over the long run; an incredible sign for investors!
What We Can Expect To See Moving Forward
Moving forward, I've got an overwhelmingly bullish opinion of what we can expect to see from Teva. The reality is that the company has already proven its strength in the world of generic medicine. That, coupled with the fact that lenders obviously see strong growth in the future of the company as well as a strong level of financial stability tells me that my bullish expectations are far from unfounded. With that said, I'm expecting to see more upward trends from Teva as time goes on.
How Binary Options Traders Can Profit From The Trends
As mentioned above, I'm expected to see bullish trends from Teva moving forward. Therefore, binary options have opportunities to make profitable call option trades. The idea here would be to wait to see a dip in the value of the stock that brings it to support. From there, traders can purchase call options in order to profit from the resulting upward trends!
What Do You Think?
Where do you think TEVA is headed and why? Let us know in the comments below!