The merger mania of March has spilled over into April with Mylan making a bid to buy Ireland-domiciled rival Perrigo for around $29 billion.
Mylan is offering $205 in a combination of cash and stock for each Perrigo share, which represents a greater than 25% premium to the latter’s stock price as of April 3. It says that “the combination of these highly complementary businesses would produce a company with critical mass in specialty brands, generics, over-the-counter and nutritional products”.
Mylan chairman Robert Coury said the proposal “is the culmination of a number of prior discussions” between the firms about “the compelling strategic and financial logic of this combination”. He regards it as a “tremendous opportunity…to create a unique leader with a one-of-a-kind profile in our industry”, with some $15.3 billion in 2014 pro forma sales.
The move comes just months after Mylan relocated from the USA to the Netherlands after buying Abbott’s main branded generics business, thus cutting its tax bill. As for Perrigo, it has recently completed its $4.5 billion purchase of Belgian OTC specialist Omega Pharma.
The proposed deal has got analysts suggesting that other main players in the generics field such as Teva and Novartis could make a rival bid for Perrigo as consolidation grips the sector again. If it comes off, it would top other mega-deals announced this year, namely AbbVie’s $21 billion deal for Pharmacyclics and Pfizer’s $16.7 billion purchase of Hospira.