Watson to buy Arrow group for $1.75 billion

Watson Pharmaceuticals Inc. said Wednesday that it would buy smaller generic drug maker Arrow Group for $1.75 billion in cash and stock, getting access to a promising drug candidate pipeline and new markets.

Watson, based in Corona, said the combined company will have about $3 billion in annual revenue. The company expects the transaction to close this year, pending review by regulators, and add to its profit in 2010.

It said privately held Arrow is one of the fastest-growing generic drug companies, with $647 million in sales in 2008. Arrow owns the U.S. rights to the authorized generic version of Pfizer Inc.’s cholesterol drug Lipitor.

Watson shares rose $1.43, or 5%, to $30.27.