Generic drug maker Mylan bids for Perrigo Co for $29 bn

Generic and specialty pharmaceuticals company Mylan NV yesterday made an unsolicited offer to buy Perrigo Co Plc for about $29 billion in cash and stock, a move designed to expand its generic drug portfolio and also stave off from being a takeover target.

Mylan is offering to pay $205 per share in cash and stock, a premium of 24.5 per cent to Perrigo's Tuesday close of $164.71.

Perrigo, based in Dublin, said that it would respond after its board had met.

In a letter to Perrigo CEO, Joseph Papa, Mylan's chairman, Robert Coury said that the deal is a natural fit and the combination would result in meaningful immediate and long-term value creation.

Earlier based in Michigan, Perrigo moved its headquarters to Ireland through an inversion in 2013. It acquired Dublin-based Elan Corp for $8.6 billion, a move that is expected to bring in savings of an estimated $150 million a year in taxes. (See: US drugmaker Perrigo buys Irish biotechnology major Elan for $8.6 bn)

Founded in 1887, Perrigo is the world's largest manufacturer of over-the-counter (OTC) drugs. It also makes general prescription drugs, infant formulas, nutritional products, dietary supplements and other products.

The company is also a leading provider of branded OTC products, generic extended topical prescription products, infant formulas, nutritional products, dietary supplements and also receives royalties from multiple sclerosis drug Tysabri.

Nearly half of Perrigo's $4.06 billion sales last year were generated from its consumer health-care division, including store-brand over-the-counter medicine like Sudafed and NyQuil.

The company's primary markets are spread over the US, Israel, Mexico, the UK, India, China and Australia.

Mylan is one of the world's leading generics and specialty pharmaceutical companies and sells its products in approximately 150 countries.

It has a portfolio of more than 1,400 generic pharmaceuticals and several brand medications. It also offers a wide range of anti-retroviral therapies, and is one of the largest active pharmaceutical ingredient manufacturers.

Last year Mylan acquired Abbott Laboratories for $5.3 billion, a move that allowed it to move its corporate headquarters to the Netherlands.

The New York Exchange-listed company has a market cap of $33.5 billion and posted net profit of $929 million in 2014 on revenues of $7.6 billion.

Coury said that the proposed merger has highly complementary businesses with strong presence in key developed and emerging markets around the world and an attractive, diversified portfolio with critical mass across generics, OTC, specialty brands and nutritionals;

He also added that the combination would create a company with annual sales of about $15 billion.

Analysts opine that the world's largest generic drugmaker Teva Pharmaceuticals has been eying Mylan and the proposed Perrigo deal has more to do with protecting itself from being acquired by the Tel-Aviv-based generic drugmaker.