By Angela Chen
Mylan N.V. 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 19% in afternoon trading to $195.45 but are down
from their intraday high of $215.73. Shares of drug maker Mylan
recently rose 14% to $68.
Perrigo, in a news release, confirmed it had received a proposal
and that its board would meet to discuss the offer; however, it
declined further comment.
Mylan Executive Chairman Robert J. Coury said in a separate news
release that the proposal is the result of prior discussions
between the two companies and that Mylan had dedicated a team to
evaluate 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 are in Europe: Mylan in the Netherlands, 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
Corrections & Amplifications
An earlier version misstated Robert Coury's title at Mylan as
well as the headquarters for the two companies.
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