Mylan to Buy Sweden’s Meda for $9.9 Billion
On the rebound from its failed $27 billion hostile bid for Perrigo, Netherlands-domiciled, US-managed drugmaker Mylan has announced it will acquire Sweden’s Meda for 83.6 billion Swedish crowns ($9.9 billion), including debt, in a cash-and-stock deal.
The latest in a series of transactions rocking the generic drugs sector was Mylan’s third grab for Meda. The Swedish company, which had rejected two bids from Mylan in 2014, also had been pursued by India’s Sun Pharma.
Additionally in 2014, Meda pursued a hostile takeover of its own, attempting a $3.1 billion acquisition of Italy’s Rottapharm.
In its first pursuit of Meda, Mylan was said to be attempting an inversion, i.e. acquiring a foreign company and moving its headquarters abroad. The former Pittsburgh, Pennsylvania-headquartered drugmaker achieved that goal later the same year when it bought the $5.3 billion overseas generics business of Abbott Laboratories.
Meda’s largest shareholder, with 23%, is Stena Sessan, the Swedish shipping group controlled by the Olsson business family.
Robert Coury, Mylan’s executive chairman, is said to have approached Meda at the end of 2015, with formal discussions getting under way early in the new year – the Swedish company had previously sworn off any further talks with Mylan. For the latest attempt, reports said Coury sought the backing of Meda’s two key shareholders.
Following the announcement, Coury said Mylan would still have sufficient resources to stem other takeovers after absorbing Meda. “We structured this transaction in a way that optimizes our balance sheet and still leaves us ample financial flexibility to continue to complement our business with additional attractive opportunities,” he said.
Mylan’s share price plunged on the news, after many analysts questioned whether it was overpaying. The agreed price, which values Meda at about 12.5 times adjusted EBITDA of $768 million on sales of $2.3 billion, was almost double the company’s closing price of 86.05 Swedish crowns on the day of the announcement.
Around 60% of the Swedish company’s sales are derived from prescription drugs, with the reminder split between OTC preparations and other consumer healthcare products. Meda’s therapeutic focus is on respiratory conditions, dermatology, pain and inflammation.
