Mylan to Acquire Abbott's Non-US Businesses in $5.3 Billion Stock Deal - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Mylan to Acquire Abbott's Non-US Businesses in $5.3 Billion Stock Deal


Mylan Inc. announced on July 14 that it has entered into an agreement with Abbott to acquire Abbott's non-US developed markets specialty and branded generics business in an all-stock transaction. Upon closing, Abbott will receive 105 million shares of the combined company worth approximately $5.3 billion based on Mylan's closing price of $50.20 on July 11, 2014, representing an approximately 21% ownership stake.

In a statement, Mylan reported that the transaction will further diversify Mylan’s business and strengthen its commercial platform outside the United States. In addition, the company reports that the transaction will provide Mylan with additional financial resources to pursue future opportunities.

The assets, which are being acquired on a debt-free basis, include more than 100 specialty and branded generic pharmaceutical products in cardio/metabolic, gastrointestinal, anti-infective/respiratory, CNS/pain and women's and men's health; and include several patent protected, novel and/or hard-to-manufacture products.  Key products include Creon, Influvac, Brufen, Amitiza, and Androgel.

Mylan reports that the assets are expected to provide approximately $1.9 billion in annual additional revenues at deal close. The business includes a sales organization of approximately 2,000 representatives in more than 40 non-US markets, as well as two manufacturing facilities in France and Japan.

The Abbott business to be sold operates in Europe, Japan, Canada, Australia, and New Zealand and includes approximately 3,800 employees. Abbott will retain its product portfolio and manufacturing facilities in other areas as well as its manufacturing facilities in the Netherlands, Germany, and Canada.

Mylan reports that the transaction is expected to approximately double the company's revenues in Europe by strengthening its presence in Italy, the United Kingdom, Germany, France, Spain and Portugal, among others. It also is expected to more than double Mylan's revenues in Canada and Japan, and build on Mylan's business in Australia and New Zealand. The transaction also provides Mylan with a meaningful presence in the specialty and branded generics market in Central and Eastern Europe, according to a company statement.

The Abbott assets involved in the transaction will be transferred to a new public company (New Mylan) organized in the Netherlands. Immediately following the transfer, Mylan will merge with a wholly owned subsidiary of New Mylan, and New Mylan will become the parent company of Mylan. The new public company will be called Mylan N.V. and will be led by the current Mylan leadership team and headquartered in Pittsburgh. Shares of New Mylan will continue to trade in the US on NASDAQ under Mylan's existing ticker symbol MYL.

The transaction has been unanimously approved by Mylan's Board of Directors and is expected to close in the first quarter of 2015, subject to certain closing conditions, including regulatory clearances and approval by Mylan's shareholders. 

Abbott will retain its branded generics pharmaceuticals business and products in emerging markets and its other businesses and products in developed markets.

Abbott reports in a statement that following the closing of the transaction, Abbott's branded generics pharmaceuticals business will focus in emerging geographies where demographics and growing healthcare systems are combining to create an increased rate of patient access to healthcare and where the majority of healthcare products are paid for by the consumer. The branded generics business that will remain with Abbott generated 2013 sales of $2.9 billion and is expected to have a sales growth rate in the upper-single to double digits.    

In addition, Abbott reports in a statement that the company does not expect to be a long-term shareholder in Mylan and plans to redeploy the net proceeds from this transaction to opportunities that would be accretive to earnings over time.

Sources: Mylan and Abbott

 

ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
What role should the US government play in the current Ebola outbreak?
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Finance development of drugs to treat/prevent disease.
29%
Oversee medical treatment of patients in the US.
10%
Provide treatment for patients globally.
6%
All of the above.
42%
No government involvement in patient treatment or drug development.
13%
Jim Miller Outsourcing Outlook Jim MillerCMO Industry Thins Out
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerFluorination Remains Key Challenge in API Synthesis
Marilyn E. Morris Guest EditorialMarilyn E. MorrisBolstering Graduate Education and Research Programs
Jill Wechsler Regulatory Watch Jill Wechsler Biopharma Manufacturers Respond to Ebola Crisis
Sean Milmo European Regulatory WatchSean MilmoHarmonizing Marketing Approval of Generic Drugs in Europe
FDA Reorganization to Promote Drug Quality
FDA Readies Quality Metrics Measures
New FDA Team to Spur Modern Drug Manufacturing
From Generics to Supergenerics
CMOs and the Track-and-Trace Race: Are You Engaged Yet?

Click here