Exclusive: Mylan near multibillion-dollar deal for Abbott drug assets - sources

Fri Jul 11, 2014 7:23pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Soyoung Kim

NEW YORK (Reuters) - U.S. generic drugmaker Mylan Inc is in advanced talks to acquire a multibillion-dollar portfolio of established products from Abbott Laboratories, people familiar with the matter said.

The proposed transaction, which is in late-stage discussions, would see Mylan acquire a big chunk of Abbott's Europe-based mature drugs for several billion dollars, said the people, who asked not to be named because the matter is not public.

The acquisition of the foreign assets, according to some of the people, could also allow the U.S. company to change its tax address to overseas, a practice known as inversion that has become popular among healthcare companies seeking to cut their tax bills and gain access to cash held offshore.

The exact value of Mylan's bid could not be learned, but people familiar with the matter previously told Reuters that Abbott was looking to sell a portfolio of mature drugs that could fetch more than $5 billion. A deal could come as soon as next week, but the discussions are continuing and could still fall apart, the people cautioned.

Abbott’s established pharmaceuticals division is headquartered in Basel, Switzerland and had 2013 sales of roughly $5 billion. About half of the sales come from emerging markets, and the remainder from other international markets. Representatives for Mylan declined to comment, while Abbott did not respond to requests for comment.

A potential deal with Abbott would come after Mylan's failed attempt to buy Swedish drugmaker Meda AB earlier this year. Meda in April rejected Mylan's revised $6.7 billion takeover bid, saying its biggest shareholder did not back a deal.

Mylan was looking to do an inversion deal partly because it was at a disadvantage compared with foreign rivals as well as other U.S. generic drugmakers that have redomiciled to a low-tax country.

Major competitors include Teva Pharmaceuticals Industries Ltd, which is based in Israel, and Actavis Plc, which re-domiciled to Ireland through a 2013 acquisition of Warner Chilcott. Both face lower tax rates.   Continued...

Traders gather at the booth that trades Abbott Laboratories on the floor of the New York Stock Exchange, December 10, 2012.   REUTERS/Brendan McDermid