• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

Israel's Teva Makes $40 Billion Takeover Bid For Mylan

Photo Credit :

Israel-based Teva has offered to acquire US-based Mylan for $40 billion to create a generic drug powerhouse to compete with rivals such as Sun Pharmaceutical Industries from India.
Teva Pharmaceutical Industries on Tuesday unveiled the unsolicited bid to acquire all outstanding shares of Mylan at at $82 per share - 50 per cent in cash and another 50 per cent in stock.
Mylan is currently ranked second in generic market, but both the companies are facing stiff competition with the growing might of entities like Sun Pharma, which has become the world's fifth largest generic drugmaker after its Ranbaxy acquisition.
Sun Pharma has also expanded its presence in markets across the world mostly through acquisitions, including that of a majority control in Taro Pharmaceuticals that had begun operations in Isarel and later expanded into North America.
Mylan has Indian-origin Rajiv Malik as its president and executive director, who led the company's commercial launch in India in 2012 and had also served with Ranbaxy in the past.
"The proposal to acquire Mylan was unanimously approved and strongly supported by the Teva Board. Teva's strategy has been to aggressively pursue growth opportunities that advance our goal of being a stronger, more diversified organisation with scale and resources to drive value across our business," Teva Chairman Yitzhak Peterburg said in a statement.
Some of the top investors at Mylan NV, including Paulson & Co, are encouraging its board of directors to consider the takeover proposal.
Teva said its takeover proposal also provided Mylan stockholders with "a more attractive alternative to Mylan's proposed acquisition of Perrigo Company Plc, as announced on April 8, 2015, as well as to Mylan on a standalone basis".
Teva had revenues of $20.3 billion in 2014.
"We have long respected Mylan's business, and we are confident that Mylan's Board of Directors and stockholders will agree that our proposal represents a significantly more attractive alternative for Mylan and its stockholders than Mylan's proposed acquisition of Perrigo," Teva President and CEO Erez Vigodman said.
Teva said its proposal represented a "37.7 per cent premium to the stock price of Mylan on April 7, 2015, which is the last day of trading prior to Mylan's press release regarding its unsolicited proposal for Perrigo".
Pressure For Revenues
Pressure has been growing on Teva for new revenue sources. Its biggest selling drug, multiple sclerosis injectable treatment Copaxone, faces competition from oral treatments and cheaper generics in the coming years.
Mylan, which makes the EpiPen product for severe allergies, is incorporated in the Netherlands and can take advantage of Dutch provisions that would make a hostile takeover difficult.
Mylan Executive Chairman Robert Coury said last week that the company had studied a transaction with Teva and concluded that such a combination "is without sound industrial logic or cultural fit," and would attract antitrust scrutiny.
Mylan is pursuing its own $29 billion unsolicited bid for over-the-counter medicines maker Perrigo Co PLC. Perrigo's board rejected that offer earlier on Tuesday.
Teva said acquisition of Mylan would create an entity with more than $30 billion in annual revenue, add to earnings in the first year and eventually generate $2 billion in annual savings.
The purchase of Mylan would also help Teva expand its offering of harder-to-produce medical products, such as soft-gel caps, topical and inhalant technologies and injectables, and increase its portfolio of specialty pharmaceuticals.
In March, Teva said it would acquire neurology company Auspex Pharmaceuticals Inc for $3.5 billion to boost its portfolio of treatments for the central nervous system.
A Teva-Mylan deal would be the second-largest healthcare transaction in the last 12 months, following generic drugmaker Actavis Plc's $66 billion purchase of Botox maker Allergan.
The wave of consolidation has also included AbbVie Inc's proposed $21 billion purchase of Pharmacyclics and Valeant Pharmaceuticals' $11 billion deal for Salix Pharmaceuticals Ltd.
Mylan shares rose 8.9 percent to $74.04 in Nasdaq trading on Tuesday, while Teva gained 1.4 per cent to $64.16 on the New York Stock Exchange. Perrigo fell 2.66 per cent to $192.82.