The generic drugmaker Mylan said it would acquire Swedish drugmaker Meda in a $7.2 billion cash-and-stock deal. It is Mylan’s third attempt to buy the company.
The move comes three months after Mylan gave up on its seven-month-long pursuit of smaller rival Perrigo. Mylan’s stock fell about 8 pct in extended trading, after it announced the 165 Swedish crowns per share offer. That works out to be nearly twice Meda’s last traded price, which had some analysts questioning the high premium.
“The deal may be earnings accretive, but Mylan is paying a huge premium in a deteriorating market,” Clinical Assistant Professor Erik Gordon, from the Ross School of Business at the University of Michigan, told Reuters.
Meda makes branded, over-the-counter and generic drugs. It already handles European sales of EpiPen, Mylan’s emergency shot for severe allergic reactions and its biggest selling branded product. Mylan said the offer, recommended by Meda’s board, valued the company at $9.9 billion, including debt.
Meda’s two largest shareholders, who own about 30 percent of the specialty pharmaceutical’s outstanding shares, have accepted the offer, Mylan added to Reuters.
In 2014, Meda spurned takeover offers from Mylan after its biggest shareholder rejected the deal.
Stena Sessan Rederi AB, controlled by the Olsson business family, is the biggest shareholder in Meda, with a 20.7 percent stake.
“Both companies have changed considerably since then,” Meda’s board chairman Martin Svalstedt told Reuters, highlighting recent acquisitions made by both drugmakers.
Last year, Mylan completed its purchase of Abbott Inc’s specialty and generics business in developed markets outside the United States, which helped it shift its tax address to the Netherlands.
Meda in July 2014 unveiled its biggest deal ever – the $3.1 purchase of Rottapharm – weeks after the Italian firm scrapped flotation plans.
Mylan said it would finance the cash portion of the offer via a bridge credit facility arranged by Deutsche Bank and Goldman Sachs.
The transaction, due to be completed by the third quarter, should immediately add to Mylan’s earnings, the company said.
Mylan shares traded at $46.60 in after-market trading. They closed at $50.54 Wednesday on the Nasdaq, while Meda’s shares closed at 86.05 crowns.