MORRISTOWN, N.J., March 1 /PRNewswire-FirstCall/ -- Watson Pharmaceuticals, Inc. (NYSE:WPI - News) today announced that it signed an agreement on February 26, 2010 to divest its equity ownership position of approximately 31% of ScinoPharm Taiwan Ltd. The transaction is subject to the parties obtaining approvals from various government agencies in Taiwan, as well as other customary closing conditions. Assuming all closing conditions are met, Watson expects the transaction to close during the first half of 2010. Under the terms of the stock purchase agreement, Watson will sell its entire holdings for net proceeds of approximately $94.0 million. The Company said that it intends to utilize the proceeds to enhance its financial ability to execute future strategic business development initiatives, as well as support other general business purposes.
"Watson's relationship with ScinoPharm has been long and beneficial. However, as we refocused our global business and increased our own active pharmaceutical ingredient (API) development and manufacturing capabilities, this relationship has become less strategic for our long-term growth," said Paul Bisaro, President and Chief Executive Officer of Watson.
Watson acquired an initial equity interest in ScinoPharm in 2004 as part of its initiative to increase access to sources of unique APIs. In 2005 and 2006 Watson increased its investment, ultimately resulting in ownership of approximately 31% of ScinoPharm. The Company has previously accounted for its return on this investment as part of its earnings on equity investments disclosures.
About Watson Pharmaceuticals, Inc.
Watson Pharmaceuticals, Inc. is a leading global specialty pharmaceutical company. The Company is engaged in the development and distribution of generic pharmaceuticals and specialized branded pharmaceutical products focused on urology and women's health. Watson has operations in many of the world's established and growing international markets.
For press release and other company information, visit Watson Pharmaceuticals' Web site at http://www.watson.com.
Statements contained in this press release that refer to nonhistorical facts are forward-looking statements that reflect Watson's current perspective of existing information as of the date of this release. For example, any statements in this press release concerning the expected uses of proceeds of the transaction, the anticipated closing date of the transaction, or other events related to products or future products and Watson's strategic initiatives and business plans are forward-looking statements. It is important to note that Watson's goals and expectations are not predictions of actual performance. Actual results may differ materially from Watson's current expectations depending upon a number of factors affecting Watson's business. These factors include, among others, timely and successful consummation and implementation of strategic initiatives; changes in the laws and regulations; and such other risks and uncertainties detailed in Watson's periodic public filings with the Securities and Exchange Commission, including but not limited to Watson's annual report on Form 10-K for the year ended December 31, 2009. Except as expressly required by law, Watson disclaims any intent or obligation to update these forward-looking statements.