Teva Pharmaceuticals (NasdaqGS: TEVA), the largest publicly traded Israeli company, could join the already hot healthcare mergers and acquisitions race and that could prove meaningful for some pharmaceuticals exchange traded funds.

“Teva has over $10 billion in debt capacity to spend on acquisitions and could go after Mylan (NYSE: MYL), which agreed to buy Abbott Laboratories’ (NYSE: ABT) generic drug unit last year, or St. Louis, Missouri-based Mallinckrodt (NYSE: MNK),” reports Gabrielle Coppola for Bloomberg.

A spate of deal-making has been a primary factor in lifting pharmaceuticals ETFs going back to last year. Those ETFs include the $342 million Market Vectors Pharmaceutical ETF (NYSEArca: PPH) , which along with some of its rivals, was recently in the spotlight due to a bidding war for Salix Pharmaceuticals (NasdaqGS: SLXP). [These ETFs Will Enjoy a Salix Takeover]

PPH, which is up 10% this year, allocates a combined 3.1% of its weight to Mylan and Mallinckrodt. The ETF also features an almost 4.2% weight to Teva. Actavis (NYSE: ACT), PPH’s seventh-largest holding at almost 5% of the ETF’s weight, has also been mentioned as a possible target, though Teva would make for an unlikely suitor because Actavis is almost 60% larger by market value than the Israeli firm.

The $1.1 billion SPDR Pharmaceuticals ETF (NYSEArca: XPH), another pharmaceuticals ETF, that has benefited from industry mergers and acquisitions activity, allocates a combined 6.3% of its weight to Mylan and Mallinckrodt. XPH has surged 14.3% this year. [Assets Keep Flowing to Healthcare ETFs]

In addition to Mylan and Mallinckrodt, several of XPH’s 39 other holdings have been previously mentioned as potential takeover targets.