In a Deal Worth $5.3 Billion Mylan to acquire Generic Drug Assets of Abbott Laboratories

2014-07-15
Published : Jul-2014

Abbott Laboratories said that it had agreed to offload its generic drug business outside the United States to Mylan, a generic drug maker in an all-stock deal that valued the business at around $5.3 billion.

Abbott will take a 21 percent stake worth around $5.3 billion in a new company which combines Mylan’s existing business with Abbott’s developed markets pharmaceuticals operations in New Zealand, Europe, Australia, Canada and Japan.

This transaction will allow Pennsylvania-based Mylan to reincorporate in the Netherlands to lower its corporate taxes and to free up cash held in overseas entities.

Executive chairman of Mylan, Robert J. Coury said that the acquisition of this business is the right next strategic transaction for Mylan as it builds on their strong momentum, and expands and further diversifies their business in the largest markets outside of the U.S.

The generic drug business that Abbott is selling operates in Canada, Europe and parts of the Asia-Pacific region and it employees around 3,800 employees. It has its manufacturing facilities in Japan and France.

The business has a portfolio of more than 100 specialties and branded generic pharmaceutical products in five therapeutic areas, which includes gastrointestinal and cardiovascular treatments.

Mylan said that the deal is expected to close in the first quarter of 2015. This deal would roughly double Mylan’s revenue in Europe and would also generate additional annual revenue of around $1.9 billion.

Mylan which was founded in 1961 sells specialty and generic drugs in around 140 countries. The company which employs around 20,000 people posted revenue of $6.9 billion in 2013.

Based in Chicago, Abbott will retain its generic pharmaceutical business in emerging markets and other businesses in developed markets.

Abbott said that after the transaction, it would focus its generic drug business on emerging markets where there is a greater opportunity for growth.

In 2013, Abbott posted revenue of $21.8 billion. Abbott was advised by Morgan Stanley while Mylan was advised by Centerview Partners and Swaine & Moore, Cravath, the law firm.

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