Headquartered in Israel, Teva is the world's leading generic drug maker, with a global product portfolio

of more than 1,000 molecules and a direct presence in about 60 countries. Teva's Specialty Medicines
businesses focus on CNS, respiratory oncology, pain, and women's health therapeutic areas as well as
biologics. Teva reached $20.3 billion in net revenues in 2013.
We suggest Teva to be a potential target of acquisition for Pfizer because of the following reasons:
1. Since the companys headquarter is situated in Israel, therefore the Law for the Encouragement
of Capital Investment is intended to encourage companies to invest in Israel. The law provides
that any company classified as an "approved enterprise" is eligible for a tax break, effectively
paying a zero tax rate.

2. Investigation by "Globes" found that, in the past ten years (2003-12), Teva has made profits of
$17.2 billion, on which it paid $1.9 billion in taxes - an effective rate of just 10.7%. Moreover, in
2012, Teva's effective tax rate was negative, for the first time in at least ten years, at minus
7.5%, amounting to a tax benefit of $137 million.

3. Isolating Teva's tax payments on its Israeli operations only, "Globes" found that the company
paid $787 million tax on $14.2 billion in profits on its Israeli operations in 2003-12, giving an
effective tax rate of just 5.6%.

Pfizers corporate tax rate currently is 27%. After acquiring Teva, Pfizer would be enjoying high tax
advantages.
Conservatively, taking the effective tax rate of 10.7% that Teva paid from 2003-2012 on the estimated
Profit before Tax of Pfizer for fiscal year 2014.
Dec 2013
Profit Before Tax $ 15.716 billion

PBT % change in Dec 2012 is (19.47) %.
PBT % change in Dec 2013 is 149.98%.
CAGR is 141%.
So Estimated PBT for 2014 assuming to be same as $ 15.716 billion.
The company paying tax = 0.27*$ 15.716 billion= $ 4.243 billion without acquisition.
After acquisition, the company would pay tax = 0.107* $ 15.716 billion = $ 1.6816 billion.
Tax Savings = $ 2.561 bilion.
4. The best-selling product of Teva called COPAXONE, the leading multiple sclerosis therapy in the
U.S. and globally, sales increased 8% during the quarter both in U.S. dollar terms and in local
currency terms to $1.142 billion, compared to $1.059 billion in the fourth quarter of 2012.
Pfizer would add the speciality product in its portfolio along with Lyrica for achieving Economies
of Scope and acquiring a strong foothold in CNS (Central Nervous System) medicines and drugs.

5. The market cap of Pfizer is $ 185.28 billion. The market cap of Teva Pharmaceuticals Ltd. Is $
51.87 billion. After acquisition, the total market value of Pfizer would be $ 237.15 billion. It
would reach closer to Roche which is generating the third highest revenues by dollars in the
world.