The Israeli drug giant Teva may have to write off a $2.3 billion investment in a Mexican company, after local health authorities shut down its factory, Globes reported on Monday.
Teva has already taken the Espinosa brothers, owners of the Rimsa drug maker, to court in New York for having made false representations to it during the due diligence examination before the acquisition of the company. The Espinosas denied the charge, claiming that the Teva executives changed their minds about the purchase and then tried to put the blame for it on them, but that they had acted in accordance with the law throughout.
Meanwhile, with the Rimsa operations suspended and many of the workers laid off, Teva’s huge investment is yielding nothing. The situation has reportedly had an adverse effect on Teva’s share price, as well.
But Teva has not given up on Rimsa. “Teva is committed to continuing to invest in its business in Mexico, to launch new products and to expand its activity in the country. We are working in full consultation with the health authorities with the aim of resuming production and restoring the products to the marketplace. Teva is committed to improving the health of patients in Mexico through the supply of high-quality, safe drugs, while complying with local law and health procedures and meeting the highest global standards that are in force at Teva with regard to quality.”
Teva’s quarterly financials are scheduled to be published Tuesday.