Israeli drugmaker Teva Pharmaceuticals (TEVA) on Tuesday announced that its $40.5 billion deal to snatch up pharma giant Allergan’s (AGN) generic drugs unit will close later than originally expected as the firm attempts to shore up regulators’ approval.
“Teva now anticipates that completing the acquisition could take as long as June 2016, based upon its current estimate of the timing to obtain clearance from the United States Federal Trade Commission,” wrote the company in an SEC filing. The firm had expected the deal to close by or slightly after the first quarter of 2016.
Allergan’s generics arm is called Actavis Generics, a holdover from the company’s previous iteration (before Actavis bought Allergan in a $70 billion deal in late 2014). The revamped Allergan then decided to spin off the generic portfolio in a sale that would also catapult Teva to the upper echelons of large, global pharmaceutical firms.
But a deal of this magnitude has to clear regulatory muster in multiple nations. While Teva received conditional approval from the European Commission last week, it still has some work to do with the FTC. Some analysts posited that the agency is consulting with the FDA on which and how many products Teva should sell off to allay antitrust concerns, and that the requested divestments could be substantial.
Fortune has reached out to Teva to ask about potential divestments the firm may be forced to make and will update this post if they respond.
The acquisition’s postponement could also be a road bump for another major pharmaceutical M&A: the proposed $160 billion Pfizer-Allergan (PFE) megamerger. That monster deal is almost certainly contingent on Allergan selling off its generics portfolio. In fact, the two companies have already discussed the possibility of a post-merger split.
