Please login to the form below

Not currently logged in
Email:
Password:

Mylan buys Abbott’s non-US generics in $5.3bn deal

Lower tax rate drives bid to create new firm based in Netherlands
Mylan

Mylan yesterday agreed to buy Abbott's specialty and branded generics business in developed markets outside the US.

In return Abbott will gain part ownership in a newly formed business that will combine Mylan's existing business and Abbott's pharmaceutical business in developed markets. The value of the deal is around $5.3bn, with Abbott to receive 105 million shares in this new entity.

For US-based Mylan the deal is partly driven by the more favourable tax rates of the Netherlands where the new business will operate.

According to chief financial officer John Sheehan in a conference call, the company expects its global effective tax rate to move from 25 per cent to approximately 21 per cent in its first full year.

Several US companies have acquired or attempted to acquire a hold in Europe in the past few months in what is known as an 'inversion' deal to reduce corporate tax. Lower corporate tax was cited as one of the reasons for Pfizer's bid for AZ, while the low tax rate of Ireland has influenced AbbVie's decision attempted takeover of Shire.

Mylan will acquire more than 100 specialty and branded generic pharmaceutical products across the following five therapy areas: cardio/metabolic, gastrointestinal, anti-infective/respiratory, CNS/pain and women's and men's health.

These products are expected to provide Mylan with an additional $1.9bn in annual revenues. Mylan will also take control of 2,000 sales reps and two manufacturing facilities.

Once the deal is completed, Abbott will be left with its branded generics pharmaceuticals business and products in emerging markets and the US as well as its other businesses and products, such as diagnostics and animal health, in developed markets.  

The deal gives the company “strategic flexibility”, according to CEO Miles White as the it continues to readjust after spinning out its research-focused pharma business as AbbVie last year.

"Our branded generics pharmaceuticals business will focus on emerging markets, where demographic changes and increasing access to healthcare are expected to drive sustainable growth,” said White.

The branded generics business that will remain with Abbott generated sales of $2.9bn in 2013 and is expected to have strong sales growth over the next few years, according to Abbott.

15th July 2014

From: Research, Sales

Share

Tags

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Hive

We're a healthcare communications agency that does things differently. We put patients at the heart of everything we do, while...

Latest intelligence

World Pancreatic Cancer Day 2018: Combating misconceptions in pancreatic cancer
Patients diagnosed with pancreatic cancer face a dismal prognosis, with the disease having the lowest survival rate of all major cancers. In spite of this, pancreatic cancer research is chronically...
World Diabetes Day: Interaction and impact of diabetes on mental health
For World Diabetes Day on the 14th November 2018, Nisha Shahrukh - Medical Writer at Mednet Group has written an article depicting the impact diabetes has on mental health. Including...
EU
Innovation in merger control and the impact on the pharmaceutical sector
Is focusing on pipeline products enough to assess regulatory risks?...

Infographics