BioCentury
ARTICLE | Company News

Mylan to acquire Abbott's ex-U.S. branded generics business

July 14, 2014 11:28 PM UTC

Mylan Inc. (NASDAQ:MYL) will acquire the ex-U.S. developed markets branded generics business of Abbott Laboratories (NYSE:ABT) in a stock deal. Abbott will receive 105 million shares, or about a 21% stake, in a newco that will combine Mylan's existing business with Abbott's generics business in Europe, Japan, Canada, Australia and New Zealand. The shares are worth about $5.3 billion based on Mylan's close of $50.20 on July 11, before the deal was announced. The publicly traded newco will be called Mylan N.V., led by Mylan's management and organized in the Netherlands. Mylan expects the deal to be immediately accretive to EPS and to lower its tax rate to about 21% from 25% in the newco's first year and to the high teens over time.

Abbott will retain its emerging markets generics business and its other businesses in developed markets. The portion of the generics business that is remaining with Abbott had 2013 sales of $2.9 billion, while the developed markets portion had sales of $2 billion for the year. Abbott said it does not expect to be a long-term shareholder in Mylan. Abbott told BioCentury it accepted equity instead of cash "given the outlook for Mylan stock and the fair value we received for the asset." ...