Teva offers to acquire Mylan at $82 per share in cash, stock

Israeli pharma major Teva on Tuesday offered to acquire US-based Mylan in a deal estimated to be around $40 billion in cash and stock.

The company has made an offer to acquire outstanding shares of Mylan at $82 per share, 50 per cent in cash and another 50 per cent in stock.

"The proposal to acquire Mylan was unanimously approved and strongly supported by the Teva Board. Teva's strategy has been to aggressively pursue growth opportunities that advance our goal of being a stronger, more diversified organisation with the scale and resources to drive value across our business," chairman of the Teva Board of Directors Yitzhak Peterburg said in a statement.

The proposed combination advances these objectives and would result in significant and sustained value creation for Teva stockholders, he added.

The offer, however, is not binding.

The combined Teva and Mylan would have pro forma 2014 revenues of approximately $30 billion. In 2016, it is expected to have revenues of over $30 billion while in 2018, it is expected to revenues of around $33 billion.

The company said its proposal also provided Mylan stockholders with "a more attractive alternative to Mylan's proposed acquisition of Perrigo Company Plc, as announced on April 8, 2015, as well as to Mylan on a standalone basis".

"We have long respected Mylan's business, and we are confident that Mylan's Board of Directors and stockholders will agree that our proposal represents a significantly more attractive alternative for Mylan and its stockholders than Mylan's proposed acquisition of Perrigo," Teva President and CEO Erez Vigodman said.

Teva said its proposal to Mylan represented a "37.7 per cent premium to the stock price of Mylan on April 7, 2015, which is the last day of trading prior to Mylan's press release regarding its unsolicited proposal for Perrigo".

While Mylan did not immediately comment on the offer, last week reaction to speculations over such a proposal, Mylan Executive Chairman Robert J Coury had stated: "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."

He had further said there would be significant overlap in the companies' businesses and it was unlikely that any such combination could obtain anti-trust regulatory clearances.

"Of course, should any party make an actual offer to acquire Mylan, the Board would carefully consider it in exercising its fiduciary duties in the best interests of the company, our stockholders and other stakeholders."

A leading global generics player, Teva's net revenues in 2014 amounted to $20.3 billion.

The potential combinations would result in a powerhouse of a generic drug developer competing against rivals such as Sun Pharma.

In the recent past, global pharmaceutical industry has been witnessing mega consolidation deals. In February Pfizer Inc had said it would acquire Hospira Inc, a leading provider of injectable drugs, infusion technologies and biosimilars, at a total enterprise value of $17 billion.

It was Pfizer's biggest acquisition after its failed $117 billion takeover bid for UK-based pharmaceuticals firm AstraZeneca in May last year.

In April last year, Swiss pharma major Novartis had said it would acquire GlaxoSmithKline Plc's (GSK) cancer drugs portfolio for $16 billion and sell its vaccines business in return for $7.1 billion, apart from forming a joint venture for the consumer healthcare business in a three-part transaction.