August 9, 2017 / 2:04 PM / a year ago

UPDATE 1-Drugmaker Teva looks to sell Medis business to help cut debt

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By Steven Scheer

JERUSALEM, Aug 9 (Reuters) - Teva Pharmaceutical Industries , the world's largest generic drugmaker, said on Wednesday it was looking for a buyer for its Medis business as it sells assets to pare down its debt burden.

Teva, which last week reported a drop in second-quarter results and cut its outlook and dividend, acquired Iceland-based Medis as part of its acquisition of Actavis last year.

"Teva is looking at every opportunity to focus our business and streamline operations, processes and structure," Teva said in an emailed statement to Reuters.

"As part of this process, a decision has been made to initiate the potential divestiture for our Medis business."

Bloomberg News, citing people familiar with the matter, reported that Medis would be valued at $500 million to $1 billion. It said Teva may also sell its respiratory treatments unit for as much as $2 billion.

Teva said it would not comment on market rumours.

Israel-based Teva is saddled with more than $32 billion in debt, much of it stemming from financing the purchase of Actavis, or Allergen's generics business, last year for $40.5 billion including Medis. Analysts and investors believe Teva paid too much for Actavis and that led to the resignation of CEO Erez Vigodman in February. His position has yet to be permanently filled.

Teva said last week that it was facing accelerating price erosion in the United States.

It is also selling its women's health and European oncology and pain businesses and said last Thursday that it expected to announce an agreement on a sale in the coming months. Proceeds from those and additional asset sales would be at least $2 billion and would go towards paying down debt, interim CEO Yitzhak Peterburg noted.

“It's a relatively fast process. They (Teva) are under pressure to make it happen,” said a banker close to a potential buyer of assets.

Teva, whose credit ratings were cut after its second quarter earnings report last week, plans to pay down $5 billion of debt this year.

Its New York-traded shares have fallen nearly 50 percent since its results on Thursday, to $18.29, their lowest since 2003. They are down 95 percent since the start of 2016.

Teva's Tel Aviv-listed shares were down 1 percent on Wednesday. (Additonal reporting by Ludwig Burger in Frankfurt; Editing by Susan Fenton)

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