Thursday, February 11, 2016
Netherlands-based pharmaceutical company, Mylan NV has informed of its imminent acquisition of Swedish brand Meda in a $7.2 billion cash-and-stock deal after having made two previous unsuccessful attempts of taking over the company.
Mylan’s endeavors to procure Perrigo, another rival company, proved to be fruitless even after seven months. It was three months later that it finally struck an agreement with MEDA.
As a result of their announcement of 165 Swedish crowns per share offer, Mylan experienced a steep fall of 8% in extended trading. This led to dubiety about the deal in the minds of analysts.
"The deal may be earnings accretive, but Mylan is paying a huge premium in a deteriorating market," said Clinical Assistant Professor Erik Gordon, from the Ross School of Business at the University of Michigan.
Clubbed with the announcement of the acquisition were Mylan’s fourth-quarter results indicative of a low estimation of profits. In the post-earnings conference with analysts, CEO Heather Bresch said, “We are still on the prowl for deals.”
A manufacturer of branded, over-the-counter and generic drugs, MEDA is responsible for the European sales of EpiPen, Mylan’s emergency shot for severe allergic reactions and its most populous branded product. Its procurement was settled on the offer recommended by them, valuing Mylan at $9.9 billion, inclusive of debt.
Mylan also obtained Abbott Inc’s specialty and generic business in developed markets extrinsic to USA. This was instrumental in making it shift its tax address to the Netherlands.
A bridge credit service provided by Deutsche Bank and Goldman Sachs will facilitate the cash portion of the offer. Once the transaction comes to a close by the third-quarter, it will add the profit to Mylan’s accrued earnings as per the company.
Source : reuters.com
