European regulators have issued a green light for Teva’s planned $40.5-billion purchase of Allergan’s global generics business.

As part of the approval, Teva has agreed to divest certain overlapping molecules in 24 European countries, other than the UK, Ireland and Iceland, where the firm will divest a majority of the current Allergan Generics business. 

As required by the European Commission, the divested business will be capable of manufacturing and marketing generic medicines on its own. The remainder of the Allergan Generics UK/Ireland business will be integrated with Teva’s operations in line with the global transaction, while, in Iceland, Teva will divest its generic business while retaining the Allergan Generics business.

The Israeli drugmaker said it continues to work closely with the Federal Trade Commission to obtain regulatory approval in the US for the move, which it claims will achieve cost synergies and tax savings of around $1.4 billion a year.

In a separate move, Pfizer is currently driving through a transaction to acquire the remainder of Dublin, Ireland-based Allergan’s business for some $160 billion, making it the biggest pharma deal in history.