Meda shareholders sell to Mylan, clearing way for $7.2B deal to close
Mylan NV secured agreements with shareholders of Meda AB to acquire 94 percent of the Swedish drugmaker's stock.
The agreements allow Mylan, a Netherlands-based generic drugmaker that's run from offices in Cecil, to take control of Meda in a deal valued at $7.2 billion.
The acquisition comes amid consolidation in the pharmaceutical industry as drugmakers look to deals to counteract slower sales and pressure on prices. In addition to its pursuit of Meda, Mylan in June completed the purchase of a dermatology business from Renaissance Acquisition Holdings for up to $1 billion. The Meda deal also gives Mylan a win after the company's unsuccessful bid to acquire Irish drugmaker Perrigo, which specializes in over-the-counter store-brand medications. A majority of Perrigo's shareholders last year rejected Mylan's offer to buy their stock.
With Meda, Mylan gains greater geographic reach and a portfolio of generic, branded and over-the-counter drugs. Meda generates about $1 billion a year from over-the-counter sales. The company also sells specialty pharmaceuticals, such as the allergy drug Dymista, and has a presence in 16 countries where Mylan doesn't operate, including developing nations such as China, Russia and Mexico.
The combined company is expected to have annual revenue of nearly $12 billion.
Two years ago, Mylan offered to buy Meda but was twice rejected by the Swedish company's board for undervaluing the company. In February, Meda's board and the company's two largest shareholders agreed to support a higher bid from Mylan.
Mylan said it will force a sale of the remaining 6 percent of Meda shares under Swedish law and is in the process of having the company's stock delisted from the Nasdaq Stockholm exchange.
To resolve antitrust concerns from U.S. regulators about the Meda deal's effects on drug prices, Mylan agreed to divest two generic drugs, felbamate, a treatment for refractory epilepsy, and carisoprodol, which is used to treat muscle spasms and stiffness.
Mylan's shares fell 21 cents, or 0.5 percent, to $46.53 on Tuesday.
Jeffrey Loo, an analyst at S&P Global Market Intelligence, said investors have been concerned that Mylan was paying too much for Meda, a company that is generating lower sales and profit. In the first half of this year, Meda posted a 4 percent drop in revenue and a 5 percent decline in income.
Mylan officials declined to comment.
The company has argued that it will boost profit of the Meda business once it's combined with Mylan by achieving $350 million in cost savings and sales growth, Loo said.
“That was part of the justification for paying such a sizeable premium,” he said. “It's one of those things where we have to wait and see how it does for Mylan.”
Alex Nixon is a Tribune-Review staff writer. Reach him at 412-320-7928 or anixon@tribweb.com.
