Teva has agreed to acquire Cephalon for approximately $6.8 billion in cash. The transaction is expected to close in 3Q011. Last month, Valeant launched a hostile bid for Cephalon at $5.7 billion. Teva’s offer equates to $81 per share of Cephalon, while Valeant was offering $73 per share.

The combined company will have complementary commercial, R&D and operational capabilities and will provide a broad spectrum of specialty branded products in niche therapeutic areas including CNS, oncology, respiratory and pain management. The combined branded portfolio represents approximately $7 billion in sales, with a pipeline including more than 30 late-stage compounds.

“We are embarking today on a new and exciting future for Teva’s branded business, and we are delighted that we will be working together with the Cephalon team,” said Shlomo Yanai, president and chief executive officer of Teva. “This is transforming for Teva’s branded business, as it will help us to deliver on our strategic goal of creating a diversified, multi-faceted company. We have been following Cephalon for a long time and are very happy with the opportunity to join forces. Our significantly broader portfolio will permit marketing and sales synergies and enhance profitability. We look forward to welcoming our colleagues at Cephalon to the Teva family.”

“Cephalon’s merger with Teva is the result of a rigorous process that included a review of a wide-range of strategic options undertaken by Cephalon’s board of directors and management team to maximize value and deliver significant returns to shareholders,” said Kevin Buchi, chief executive officer of Cephalon. “By joining forces with Teva, we will benefit from their scale, worldwide reach and operational excellence, allowing us to further pursue our shared goals of delivering new, innovative therapies to help patients around the world. Teva shares our strong commitment to R&D, and we believe our pipeline will thrive under their leadership. We look forward to working with the Teva team to ensure a smooth transition and complete the transaction as expeditiously as possible.”