And The Winner From The Mylan-Perrigo Merger Is... Teva?

In a report published Wednesday, Citigroup analyst Liav Abraham commented on a Mylan NV (NASDAQ: MYL) and Perrigo Company plc (NYSE: PRGO) combination, noting that a bid from Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA) is still possible, but challenging.

According to Abraham, if Teva is interested in acquiring Mylan, a bid would need to be made in the near-term. A Teva-Mylan combination would generate "material" earnings per share accretion for Teva and would likely be well received by the Street. However, Teva would need to engage in a hostile bid process for the company – made even more complicated by Mylan's recently implemented poison pill.

Abraham said that Teva's strategy of acquiring smaller branded and generic companies will result in a long-term value creation opportunity and provide greater portfolio diversification and a more attractive longer term growth profile.

Related Link: Is Teva A Better Target For Mylan Than Perrigo? 2 Analysts Share Their Thoughts

Finally, the analyst suggested that a potential Teva combination with Actavis plc (NYSE: ACT)'s generics business is preferred over an outright acquisition of Mylan. In fact, the prospect of a potential Mylan sale could entice Actavis to speed up a divestiture of its generics business which isn't considered to be a core strategic asset.

Shares of Teva remain Buy rated with an unchanged $70 price target.