Perrigo Completes Paddock Labs Purchase

Generic and over-the-counter drug maker Perrigo Co. said it completed its $540 million purchase of generic drug maker Paddock Laboratories.

NEW YORK (AP) -- Generic and over-the-counter drugmaker Perrigo Co. said Tuesday it completed its $540 million purchase of generic drugmaker Paddock Laboratories.

Perrigo said federal antitrust regulators approved the deal after it agreed to sell a group of product lines to Watson Pharmaceuticals Inc. Perrigo, of Allegan, Mich., agreed to buy Minneapolis-based Paddock in January. The Federal Trade Commission delayed its approval in June, asking Perrigo to provide additional information.

Watson Pharmaceuticals said it is acquiring four approved products from Perrigo. Those products are a generic version of Loprox shampoo, which is used to treat seborrheic dermatitis; an ammonium lactate cream and lotion, used to treat dry skin and related conditions; and two approved promethazine suppositories. Promethazine is used to treat allergic reactions. The Parsippany, N.J., company is also getting two undisclosed development-stage products. The companies did not disclose terms of the divestiture.

Perrigo said the approved products would account for less than 0.2 percent of the combined company's annual revenue. Perrigo had $2.27 billion in revenue in its latest fiscal year, and it has said Paddock had annual sales of about $200 million. The company expects to record a $95 million tax benefit as part of the deal.

Perrigo said it is the world's largest manufacturer of store-brand over-the-counter drugs and infant formulas, and it said the acquisition of Paddock would bolster its portfolio of specialty generic drugs, or drugs that require special handling. Specialty drugs are one of the fastest-growing parts of the pharmaceutical market.

Shares of Perrigo rose 44 cents to close at $93.68 Tuesday. Watson shares lost 74 cents to $68.62 during the regular session and rose 35 cents to $68.97 in aftermarket trading.

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