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Mylan offers $29B for drugmaker Perrigo

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Mylan offers $29B for drugmaker Perrigo

Pharmaceutical company Mylan NV (MYL) is offering to buy fellow drug maker Perrigo (PRGO) in a cash and stock acquisition that would create a nearly $29 billion generic medications giant. Netherlands-based Mylan said Wednesday it had offered $205 per share in a non-binding proposal that was delivered to Ireland-headquartered Perrigo on April 6. The offer represents a $24.5% premium to Perrigo’s $164.71 closing price in Tuesday trading. Perrigo shares rocketed up 21.71% to $200.56 Wednesday afternoon following the announcement of the latest proposed entry in a recent surge of pharmaceutical industry mergers and acquisitions.635640953008554940-GTY-452153266

Similarly, shares of Mylan were up 14.2% at $68.03 in afternoon trading. Mylan said the proposed combination of complementary firms would create a combined business with critical mass in specialty brands, over-the-counter medications and nutritional products. “This proposal is the culmination of a number of prior discussions between Mylan and Perrigo about the compelling strategic and financial logic of this combination,” Mylan Executive Chairman Robert Coury said in a statement issued with the announcement. “This combination would result in meaningful immediate and long-term value creation, and our proposal is designed to deliver that value to shareholders and other stakeholders of both companies.”

The combined companies would have “a very strong financial profile,” including what would have been approximately $15.3 billion in 2014 pro forma sales, Mylan said in the proposal delivered to Perrigo CEO and Chairman Joseph Papa. Perrigo said its board of directors will meet to discuss the proposal and make a further announcement “when appropriate.” Mylan specializes in generic drugs, manufacturing and marketing approximately 1,400 different medicines to retail, wholesale, government and institutional customers.

The company’s offer for Perrigo comes less than six weeks after Mylan completed its $5.3 billion acquisition of the branded non-U.S. and generics businesses of Abbott Laboratories (ABT). Mylan, previously based in Pennsylvania, shifted its corporate headquarters to the Netherlands as part of the so-called corporate tax inversion. Designed in part to cut company’s future U.S. tax bills, corporate inversions have drawn criticism from the Obama administration and congressional Democrats who contend they could erode the nation’s tax base. The Department of the Treasury last year introduced new regulations designed to make the transactions more difficult to complete.

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