Friday, October 9th17.0°C

Mylan to buy Abbott's branded generic-drug businesses outside US for $5.3B in stock

PITTSBURGH, Pa. - The generic drugmaker Mylan is buying Abbott Laboratories' generic-drugs business in developed markets for stock valued at about $5.3 billion.

Mylan said Monday that the deal will diversify and expand its business outside the U.S. The combined company will be organized in the Netherlands, which will help reduce its tax expenses. The company will keep its headquarters near Pittsburgh.

The deal is expected to lower Mylan's tax rate to approximately 20 per cent to 21 per cent in the first full year, and to the high teens after that.

Several other U.S. companies are using mergers to reincorporate in countries with lower tax rates. These moves are raising concerns among U.S. lawmakers because they can cost the federal government billions in tax revenue.

The business to be acquired by Mylan encompasses more than 100 generic and specialty drugs sold in Europe, Japan, Canada, Australia and New Zealand. Some of the products include Creon, Influvac, Brufen, Amitiza and Androgel. It also include manufacturing plants in France and Japan.

The portfolio of products accounted for about $2 billion in sales last year.

Abbott is keeping its branded generic drug business in emerging markets. That business had 2013 sales of $2.9 billion. It is also keeping its other businesses and products in developed markets.

Abbott will own about 21 per cent of the combined Mylan company — which will be called Mylan NV — but does not intend to remain a long-term shareholder. Shares of Mylan NV will trade on the Nasdaq under Mylan's existing ticker symbol, "MYL."

The transaction is expected to about double Mylan's revenue in Europe by strengthening its presence in countries such as Italy, the U.K., Germany, France, Spain and Portugal. It also is expected to more than double Mylan's revenue in Canada and Japan, and strengthen its business in Australia and New Zealand. The deal also gives Mylan a meaningful presence in the specialty and branded generics market in Central and Eastern Europe.

The deal is expected to close in early 2015. It is expected to immediately add to Mylan's earnings, to the tune of about 25 cents per share in adjusted earnings in the first year, increasing through 2018.

Mylan Inc. is based in Canonsburg, Pennsylvania.

Mylan's stock added $2.10, or 4.2 per cent, to $52.30 in premarket trading, while shares of Abbott gained 94 cents, or 2.3 per cent, to $42.24 .

The Canadian Press

Read more Business News


Recent Trending

Today's Market
S&P TSX13964.77-13.89
S&P CDNX551.64+4.58
S&P 5002009.95-3.48
CDN Dollar0.7723+0.0038
Natural Gas2.495-0.003

Okanagan Companies
Pacific Safety0.225-0.005
QHR Technologies Inc1.22-0.01
Metalex Ventures0.06+0.01
Russel Metals21.37-0.18
Copper Mountain Mining0.67+0.06
Colorado Resources0.07+0.00
ReliaBrand Inc0.0255+0.0089
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.08-0.01
Decisive Dividend Corp3.25+0.14
Diamcor Mining0.97+0.03



2446071#107-1565 Noble Court
1 bedrooms 1 baths
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...



Member of BC Press Council