Mylan NV (NASDAQ:MYL) Offers $28.9 Billion For Perrigo

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Mylan NV (NASDAQ:MYL), on Wednesday, proposed a premium offer of $205 per share to buy Perrigo Company plc Ordinary Shares (NYSE:PRGO). The new entity would be a ‘powerhouse for generic medicine.’

Mylan NV, which already makes 1,400 medications, proposed that it could spend as much as $28.9 billion in cash and stock to acquire Perrigo. Mylan’s offer of $205 per share is a premium of 25% as of Tuesday’s price of Perrigo Company PLC.

For Mylan, such a proposal is a first of its kind, in terms of size, and is nearly four times more than its previous deals. If the deal materializes, this would further support the expansion plans of the company.

Previously, Mylan had made the acquisition of Abbott Laboratories, non-U.S. operations in 2013, for $5.3 billion. The move was to match the tax compulsions, allowing Mylan to operate in low-taxing regions of the Netherlands.

Perrigo Company plc Ordinary Shares (NYSE:PRGO) too has adopted tax-inversion techniques when, in 2013, it acquired Elan Corp. The latter’s operations in Dublin, Ireland, allow PRGO to gain low-tax benefits.

The offer, by Mylan, appears to have pleased investors of Mylan as well as Perrigo. The share prices of both the stock had gained 15% and 18% respectively.

Analyst firms in the U.S. Healthcare sector, such as Allianz Global Investors, claim Mylan’s offer to acquire Perrigo Company plc ‘makes sense.’

Speaking for Allianz Global Investors, head of the health care division, John Schroer, remarked that the Mylan global branding position and greater scale distribution would be the perfect foil for ‘solid strategic benefit’ for Perrigo.

For Mylan, the move to takeover Perrigo, is strategic on two levels, opine analysts. By making a public offer to take over Perrigo, Mylan has defended itself from hostile takeover possibilities by the likes of Teva Pharmaceuticals Industries Ltd. The latter is an Israeli drug maker and on the lookout for high potential players of the likes of Mylan NV (NASDAQ:MYL). At the same time, Perrigo Company plc Ordinary Shares (NYSE:PRGO) board does not appear to be enthusiastic about takeovers, therefore, the public offer allows Mylan a much better platform to begin negotiations with Perrigo Company plc.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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