Rather than agreeing to be acquired by Mylan, Perrigo has staked a claim to independence by buying several over-the-counter drug assets from GlaxoSmithKline (GSK).
Perrigo is currently in a cat-and-mouse game with Mylan – which in turn is being pursued by Israel’s Teva – and along with rejecting three bids from its suitor has been buying up assets that may make it too big for Mylan to swallow.
Financial terms of the GSK transaction have not been disclosed, but the deal covers a portfolio of nicotine replacement therapies – including NiQuitin in all markets except the US and Australia and Nicotinell – as well as cold and flu and cold sore remedies.
The transferred brands had sales of around $110m last year, it said, and is currently owned by the recently formed consumer healthcare joint venture with Novartis, in which GSK has a majority stake. The JV was required to divest the brands on antitrust grounds as a condition of the deal getting approved by regulators.
Perrigo completed a €3.6bn takeover of Belgian consumer health firm Omega Pharma last November – having already bought Elan for $8.6bn in 2013 to allow it to cut its tax rates via a shift in domicile to Ireland – and adding GSK’s portfolio will bolster its European operations further.
The Irish company’s chief executive – Joseph Papa – said the deal was an extension of Perrigo’s strategy of carrying out “elective, accretive transactions to expand our durable base business.”
Perrigo’s consumer healthcare business accounted for just over half its total net revenues of a little over $1bn in the first quarter of the year.
Teva eyeing larger Mylan stake?
Meanwhile, Teva is reportedly planning to purchase additional shares in Mylan, adding to the 1.35% stake it bought last week to bring its total holding to 1.8%, according to a Reuters report. The Israeli company first signalled its desire to acquire Mylan in April, when it suggested a $40bn deal that was roundly rejected.
Mylan has claimed Teva’s purchase breached US antitrust laws on the grounds that companies which buy stakes worth more than a threshold value of around $76m should first seek regulatory approval. There is speculation that Teva wants to amass a stake in order to exercise voting rights against the Perrigo deal – which Mylan still needs put to its shareholders.
The company’s chairman Robert Coury said last month it might even consider buying Teva down the line, after a Perrigo deal is completed, on the grounds that Mylan has a better executive team and more experience in handling acquisitions than its Israeli rival.