By Angela Chen
Mylan NV has proposed acquiring Perrigo Co. in a cash-and-stock
transaction that would value the maker of generic drugs at $205 a
share.
The proposal is worth about $30 billion in cash and stock based
on Perrigo's share count of 147 million at March 30. The per-share
offer represents a 25% premium to Perrigo's close on April 3, the
last trading day before Mylan's proposal.
Shares of Perrigo, a maker of over-the-counter health-care
products, jumped 25% in midday trading to $205.66. Shares of drug
maker Mylan rose 13% to $67.40.
Representatives from Perrigo weren't immediately available for
comment.
Mylan Chief Executive Robert J. Coury said in a news release the
proposal is the result of prior discussions between the two
companies and that Mylan had dedicated a team to the evaluation of
Perrigo. He added that the deal would create a company with
pharmaceutical expertise as well as a high-quality operating
platform.
The combined company would have had about $15.3 billion in pro
forma sales in 2014.
In a letter to Perrigo Chief Executive Joseph Papa, Mr. Coury
said the deal offered "a broader variety of opportunities to our
employees and increased stability for the communities." The letter
added that Mylan wanted Mr. Papa to be co-chairman of the combined
company and a member of Mylan's board.
Mylan, based in England, specializes in developing and
distributing generic drugs and has had its eye on acquisitions.
In February, it bought part of Abbott Laboratories'
generic-drugs business for $5.3 billion in a deal structured as a
tax inversion. Mylan also recently agreed to buy certain women's
health-care businesses from India's Famy Care Ltd. for $750 million
in cash, in a move that will position Mylan as a leading provider
of contraceptives in emerging markets. Last month, it reported an
"exceptional" quarter as profit grew 5%.
For its part, Perrigo last year agreed to buy Belgium-based
Omega Pharma NV in a bid to expand its portfolio of
over-the-counter drugs and broaden its market presence throughout
Europe.
Both companies have headquarters in the United Kingdom: Mylan in
Hertfordshire, England, and Perrigo in Dublin. As such, they
benefit from lower corporate taxes than their American
counterparts, giving them more flexibility in deal-making.
In recent years, more businesses--especially in the medical and
health-care industries--have attempted tax inversions, which is
when an American company moves its tax home to a country such as
the U.K. or Ireland for the lower taxes.
Mylan's $5.3 billion acquisition of part of Chicago-based Abbott
Laboratories' generic-drugs business has been structured as an
inversion deal.
Last June medical-device maker Medtronic agreed to acquire
Dublin-based Covidien PLC for $42.9 billion and become an Irish
company. Drug maker AbbVie tried the same with its planned $54
billion acquisition of Irish drug company Shire PLC. The deal was
eventually called off in light of new tax rules from the U.S.
Treasury Department that seek to discourage such inversions.
Write to Angela Chen at angela.chen@dowjones.com
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