Deutsche Bank Takes EUR257 Million Hit On Actavis-Watson Deal

Deutsche Bank AG (DB, DBK.XE) said Wednesday it will book a EUR257 million impairment charge in the first quarter from exiting its exposure to generic drug maker Actavis, which will be sold to U.S. competitor Watson Pharmaceuticals Inc (WPI).

"The transaction is expected to close in the fourth quarter of 2012," and will lead to a Core Tier 1 capital accretion of approximately EUR290 million, Deutsche Bank said.

Actavis in a separate statement said Wednesday that it will be bought by U.S. peer Watson in a EUR4.5 billion ($5.92 billion) deal.

Actavis was taken private in 2007 by Icelandic billionaire Thor Bjorgolfsson's private-equity firm Novator in a roughly $5 billion deal. The chunk of the leverage buyout loan came from German lender Deutsche Bank. Actavis then went on an acquisition spree, snapping up generic-drug companies all over the world, building a big debt load in the process.

Deutsche Bank, which will release its first-quarter figures Thursday, reportedly took charge at Actavis when a big chunk of Mr. Bjorgolfsson's wealth was wiped out in late 2008 through the collapse of Icelandic bank Landsbanki Islands hf, making a restructuring of Actavis debt necessary.

-By Eyk Henning, Dow Jones Newswires; [phone]; [e-mail]