Mylan Offers $30 Billion Bid for Irish Perrigo Company, As Share Price Skyrockets
April 8, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Pittsburgh, Penn.-based Mylan Pharmaceuticals, Inc. announced today that it will attempt to acquire generic drugmaker Perrigo Company in a $30 billion cash-and-stock transaction valued at $205 a share, a 25 percent premium to the company’s current trading price.
News of the announcement sent shares of Mylan shooting up in midday trading Wednesday, a move that caused market officials to halt trading. Perrigo shares also skyrocketed 28 percent.
Dublin, Ireland-based Perrigo Co. has a share count of 147 million as of March 30. Mylan said its proposal was delivered to Perrigo's chairman on April 6. Mylan said the deal would create “significant operating synergies.”
“The combination of these highly complementary businesses would produce a company with critical mass in specialty brands, generics, over-the-counter (OTC) and nutritional products; a powerful commercial platform with reach across all customer channels,” said Mylan in a statement, “[As well as] an exceptional high-quality operating platform; and opportunities to generate enhanced growth and deliver significant immediate and long-term value and benefits for shareholders and the other stakeholders of both companies.”
Mylan execs said that the two companies’ management teams had been kicking around the idea of a merger for quite a while, and the resultant offer was “the culmination of a number of prior discussions between Mylan and Perrigo about the compelling strategic and financial logic of this combination.”
Mylan's Executive Chairman Robert J. Coury was particularly bullish on a match.
"This combination would result in meaningful immediate and long-term value creation, and our proposal is designed to deliver that value to shareholders and other stakeholders of both companies,” said Coury. “We have great respect for Perrigo's board and management team and what they have built. We look forward in the weeks ahead to working with them to capitalize on this tremendous opportunity and working together to create a unique leader with a one-of-a-kind profile in our industry."
The deal would just be the latest shopping trip for Mylan, which has been attempting to build out its brand via bolt-on acquisitions, including women’s health specialists Famy Care and a massive $5.3 billion tax inversion acquisition of Abbott Laboratories . On Feb. 2 Mylan acquired several women’s health care business units from Mumbai, India-based Famy Care Limited. The deal was handled through Mylan Laboratories Limited, Mylan’s Indian subsidiary.
Mylan will buy certain female reproductive health care businesses for $750 million in cash, with additional payments up to $50 million contingent on development and regulatory milestones. The deal is structured in such a way that Famy Care will spin off its women’s health care businesses under a demerger plan that has been approved by the courts. After the demerger, Mylan will buy the shares of the new spinoff company.
“In 2008, Mylan established a partnership with Famy Care, significantly enhancing its presence in the women’s health care segment in the U.S. and other developed country markets,” said Heather Bresch, chief executive officer of Mylan in a statement. “With today’s acquisition, we are building on this successful partnership and further accelerating our global growth in this important therapeutic area. We see many opportunities to tap the large women’s health care market in Europe, particularly through our pending Abbott deal.”
On Jan. 29, 2015, Mylan announced a special meeting of shareholders which approved Mylan’s pending acquisition of Abbott’s non-U.S. developed markets specialty and branded generics business and reorganization in the Netherlands. Abbott will transfer those products to a new public company organized in the Netherlands dubbed “New Mylan.” Mylan will then merge with a wholly owned subsidiary of New Mylan, and New Mylan will take over the role of parent company.
Famy Care markets a range of women’s health products that include oral and injectable contraceptives, intra-uterine devices (IUDs), and hormone-replacement products. Famy Care is the largest producer of generic oral contraceptives in the world and runs four manufacturing facilities in India, two approved by the U.S. Food and Drug Administration (FDA) and the European Union.
“This transaction represents a significant milestone for Famy Care and its employees, who have created a world-class women’s health care franchise,” said J.P. Taparia, non-executive chairman of Famy Care in a statement. “We foresee significant opportunities in the women’s health care business across developed and emerging markets, and the proposed transaction provides an opportunity for our team to capture the opportunity in an even more effective manner. Famy Care and Mylan have shared a very strong partnership since 2008, and the Famy Care team looks forward to taking our vision and ambitions to the next level within Mylan.”
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