Mylan makes $9.9B offer for Meda

The offer values Meda at SEK 165 per share

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HERTFORDSHIRE, England & PITTSBURGH—Mylan N.V. is kicking 2016 off with a multibillion-dollar deal, having announced a recommended public offer to the shareholders of Meda Aktiebolag to tender their Meda shares to Mylan. The total offer consideration consists of a combination of cash and Mylan common shares with a value at announcement of SEK 165 per Meda share, for a total value for all Meda shares (including Meda net debt) of approximately SEK 83.6 billion or $9.9 billion.
Mylan's board of directors has unanimously approved the offer, and Meda's board has unanimously recommended it to the company's shareholders. In addition, Meda's two largest shareholders, who hold roughly 30 percent of the company's outstanding shares, have undertaken to accept the offer, under certain conditions. The offer is subject to several customary conditions, including clearance from relevant competition authorities, and is expected to be completed by the end of the third quarter of 2016. The offer is not subject to approval by Mylan shareholders or any financing conditions.
"Our acquisition of Meda will allow us to accelerate and deliver on the clear and compelling vision and strategy we have continuously communicated to our shareholders, and once again deliver a transaction that will create significant value. We believe Mylan is uniquely positioned in the global pharmaceutical space today, with very strong fundamentals and a long and successful track record of executing on all previous acquisitions and organic opportunities. We structured this transaction in a way that optimizes our balance sheet and still leaves us ample financial flexibility to continue to complement our business with additional attractive opportunities,” Mylan Executive Chairman, Robert Coury, commented in a press release. "Meda is a unique and strategic asset, with a high-quality workforce, which will add to our powerful, diversified and sustainable global platform and provide exciting new opportunities for Mylan, its shareholders and all of our other stakeholders. I look forward to welcoming Meda's talented workforce to Mylan upon closing, and also to welcoming our newest shareholders, including Stena and Fidim. On behalf of Mylan's entire board of directors, we look forward to them becoming long-term shareholders in the success of our combined company."
The transaction, should it go through, is expected to be immediately accretive to Mylan earnings, with accretion increasing significantly after the first full year, 2017, as synergies are realized. The transaction creates an opportunity to achieve 35 to 40 cents accretion per share in 2017 and gain ground toward Mylan's goal of $6 in adjusted diluted EPS target in 2017 versus 2018. The combined entity will boast a portfolio of more than 2,000 products across the branded/specialty, generics and over-the-counter fields, sold in more than 165 markets around the world. Once combined with Meda, Mylan will have a financial profile with approximately $11.8 billion in combined 2015 sales and combined 2015 adjusted EBITDA of approximately $3.8 billion.
Synergies of approximately $350 million are expected by year four after the close of the deal. While Mylan noted that “the integration of Mylan and Meda will likely entail some changes to the organization, operations and employees” in order to realize the estimated synergies, the company added that “Before completion of the offer, it is too early to say which measures will be taken and the impact these would have. There are currently no decisions on any material changes to Mylan's or Meda's employees and management or to the existing organization and operations, including the terms of employment and locations of the business.”
"On behalf of the Meda board, I am pleased to announce that we recommend to our shareholders to accept Mylan's offer,” said Peter von Ehrenheim, member of Meda's board of directors. “We believe that the offer provides excellent value for Meda shareholders, and we share a common vision with Mylan to create a leading pharma player. The transaction will provide critical mass across all commercial channels in Europe, create a leading U.S. specialty business and provide an exciting platform for growth in emerging markets."
Heather Bresch, CEO of Mylan, added, "Given our long relationship and existing successful EpiPen partnership in Europe with Meda, we have come to know their business, people and culture extremely well, and we are confident that we will be able to quickly begin realizing the significant value we see from this combination and continue to enhance our leadership position in today's highly competitive and rapidly evolving industry."
SOURCE: Mylan press release

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