Mylan announces $9.9 billion Meda acquisition

HERTFORDSHIRE, England and PITTSBURGH — Mylan on Wednesday announced that it would be acquiring specialty pharmaceutical company Meda for about $9.9 billion, including Meda’s net debt. Both companies’ boards of directors have approved the acquisition offer, as have Meda’s two largest shareholders, Stena Sessan AB and Fidim SRL. The companies expect the deal to close in the third quarter of 2016, following regulatory approval. 

 

The acquisition of Meda — whose business is divided 60%/40% between prescription and OTC, respectively — will grow Mylan’s business in several ways, not least of which will be the combined company’s portfolio of more than 2,000 products in branded, specialty, generic and OTC drugs, with access to more than 165 markets, the company said. In particular, the Meda acquisition will expand Mylan’s reach into such emerging markets as China and Russia while expanding its OTC offerings. Mylan expects that its OTC division at the close of the transaction will be worth about $1 billion. 

 

“We have been very clear about our commitment to enter the OTC space and continue our expansion in emerging markets,” Mylan CEO Heather Bresch said. “Meda and Mylan also have an extremely complementary therapeutic presence and we see exciting opportunities across a number of strategically important categories, particularly allergy/respiratory, given the strength of our combined portfolio, the multitude of exciting launches we will have in the coming years, and the commercial strength of our combined business.”

 

This acquisition, Mylan said, will build on its recent purchase of Abbott Laboratories’ branded generics and specialty businesses outside the U.S. and will consolidate the EpiPen in Europe, the market where Mylan and Meda have worked together on the anaphylaxis treatment. 

 

“The proposed transaction with Mylan is very compelling from a strategic standpoint and I believe Meda will be a strong partner for Mylan and will bring additional value to Mylan,” Meda CEO Dr. Jörg-Thomas Dierks said. “The two businesses are highly complementary, and the combined business will benefit from strong therapeutic presence in respiratory/allergy, dermatology and pain and inflammation, as well as enhancing our mass in Europe and US presence.”

 

Mylan expects the acquisition to be immediately accretive to earnings, increasing signiciantly after 2017. The company projects about $0.35 to $0.40 in accretions in 2017, which Mylan says indicates it is on track to realize a return of $6 in adjusted diluted earnings per share in 2017.