Mylan Laboratories to acquire Merck generics unit for $6.6 billion

14 May 2007

1

Mumbai: Mylan Laboratories Inc of the United States has agreed to acquire the generics business of Merck KGaA of Germany for $6.6 billion ( 4.9 billion euros) in cash.

Merck said it plans to use the proceeds of the agreed deal for a special dividend and to pay off debt. Merck had accumulated net debt of 5.5 billion euros at end-March following its 10.2 billion euro acquisition of Swiss biotech firm Serono last year.

"We have achieved a very good price. We are very pleased," Merck chief executive Karl-Ludwig Kley said.

The deal, however, is subject to regulatory approval and is expected to close in the second half of this year.

The combination would create "a vertically and horizontally integrated generics and specialty pharmaceuticals leader with a revenue base and a global footprint." Mylan said in a statement.

The combined entity would have a revenue of about $4.2 billion and a gross profit of about $1.0 billion in 2006, Mylan said.

At €4.9 billion, Mylan is paying about 2.7 times last year sales of the Merck unit, roughly the same multiple that Germany''s Stada paid for Hemofarm last year and 2.5 times higher than Barr aid for Pliva.

Mylan said Merrill Lynch, Citigroup and Goldman Sachs would help finance the deal, and it would issue up to $2 billion of equity and equity-linked securities to lower its debt in the near term. The company is also suspending its dividend payout.

Merck''s generics unit, with sales of 1.8 billion euros in 2006, ranked fourth in the world behind Israel''s Teva Pharmaceutical Industries, Swiss Novartis AG''s Sandoz unit and US Barr Pharmaceuticals Inc.

The generics business of Merck, which operates in 90 countries, makes branded drugs like EpiPen for treatment of life-threatening allergic reactions, and DuoNeb for treatment of smokers'' lung.

Israel''s Teva and Iceland''s Actavis had been among the potential buyers of Merck''s generics business.

Mylan is a global pharmaceutical company with market leading positions in generic pharmaceuticals, transdermal technology and unit dose packaged products. We focus on providing an extensive line of affordable, high quality prescription drugs in traditional and innovative dosage forms, and we enjoy a well-deserved reputation for scientific expertise in creating difficult-to-formulate and high-barrier-to-entry generic products.

Mylan operates through three principal subsidiaries: Mylan Pharmaceuticals, a world leader in generic pharmaceuticals; Mylan Technologies, the largest producer of generic and branded transdermal patches for the US market; and UDL Laboratories, the top US-supplier of unit dose pharmaceuticals

Mylan also owns a controlling interest in Matrix Laboratories, one of the world''s premier suppliers of active pharmaceutical ingredients (API). Mylan also has a European platform through Docpharma, a Matrix subsidiary, which is a marketer of branded generics in Europe.


Business History Videos

History of hovercraft Part 3 | Industry study | Business History

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2 | Industry study | Business History

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1 | Industry study | Business History

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | Industry study | Business History

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more
View details about the software product Informachine News Trackers