Teva Pharmaceutical Industries building in Jerusalem..
(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Israeli generic pharmaceuticals giant Teva on Tuesday offered to buy its competitor Mylan for roughly $40 billion, but the deal is by no means guaranteed to move forward.
“The proposed combination of Teva and Mylan would create an industry-leading company, well positioned to transform the global generics space,” Teva CEO Erez Vigodman wrote in a letter to the executive chairman of the Mylan board, Robert J. Coury.
Teva offered to buy all outstanding Mylan shares for $82, some 48 percent above its March 10 price, in a halfcash, half-stock deal that it said would lead to $2b. in cost savings. Scooping up the 489.4 million shares of the NASDAQ-traded company that were outstanding as of Tuesday would put the deal at $40.13b. It would be the company’s largest acquisition by far and, according to The Wall Street Journal, the largest US acquisition of 2015.
But Mylan, a US-founded company that is managed out of the UK, may not be willing to give up its own acquisition plans. On April 8, the company offered to buy Israel’s Perrigo for $29b., an offer Teva said would have to be rescinded should Mylan agree to its takeover bid.
When Bloomberg reported that Teva was considering making an offer on Mylan, Mylan took the unusual step of publicly rebuffing it.
“We have studied the potential combination of Mylan and Teva for some time and we believe it is clear that such a combination is without sound industrial logic or cultural fit,” Coury wrote on April 17, questioning whether such an acquisition could even pass muster with antitrust regulators.
Yet he left open the possibility of acquiescing in the event that Teva made a formal offer.
In Tuesday’s letter, Teva acknowledged that it was “disappointed” by the “premature” statement, but offered to meet with the company to convince it of the merits of the proposal, which Teva’s board approved unanimously.
“The proposed combination of Teva and Mylan would create a leading company in the pharmaceutical industry, well positioned to transform the global generics space. The combined company would leverage its significantly more efficient and advanced infrastructure, with enhanced scale, production network, end-toend product portfolio, commercialization capabilities and geographic reach,” the company wrote.
Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>