Date: 2016-08-05
Type of information: Company acquisition
Acquired company: Meda (Sweden)
Acquiring company: Mylan (USA - PA)
Amount: $ 9.9 billion
Terms: * On August 5, 2016, Mylan announced that it has completed the settlement of its recommended public offer to the shareholders of Meda Aktiebolag to tender all their shares in Meda to Mylan. As previously announced, the Offer was accepted by shareholders holding approximately 94% of the total number of outstanding shares and votes in Meda, as of July 29, 2016 . Upon the completion and settlement of the Offer, Mylan acquired each of these shares in accordance with the terms of the Offer. The Offer was initially announced on Feb. 10, 2016 and it was declared unconditional on Aug. 2, 2016 . The acceptance period expired on July 29, 2016 and will not be extended. * On July 27, 2016, Mylan announced that the U.S. Federal Trade Commission (FTC) has cleared Mylan's proposed transaction to acquire Meda subject to Mylan's divestiture of certain products not significant to Mylan's earnings following the consummation of its recommended public offer to the shareholders of Meda to tender all their shares in Meda to Mylan. The FTC clearance represents the final regulatory clearance required to complete the Offer and Mylan has now received all antitrust regulatory clearances required to acquire Meda. As a result, completion of the Offer is no longer conditional upon receipt of further regulatory or government clearances. * On February 10, 2016, Mylan announced it has agreed to buy Meda AB. The total Offer consideration consists of a combination of cash and Mylan ordinary shares with a value at announcement of SEK 165 per Meda share. The total value of the Offer for all Meda shares, including Meda net debt, is approximately SEK 83.6 billion ($ 9.9 billion), which represents a multiple of approximately 8.9x 2015 adjusted EBITDA with synergies. The Offer has been unanimously approved by Mylan's board of directors and unanimously recommended by Meda's board of directors. Meda's two largest shareholders, representing in the aggregate approximately 30 percent of Meda's outstanding shares, have undertaken to accept the Offer, subject to certain conditions. Meda's shares are listed on Nasdaq Stockholm, Large Cap. The Offer is subject to the satisfaction of a number of customary conditions, including clearance from relevant competition authorities, and is expected to be completed by the end of the third quarter of 2016. The Offer is not subject to approval by Mylan shareholders and is not subject to any financing conditions.
At announcement, the Offer consideration values each Meda share at SEK 165 and the total equity value of the Offer for all Meda shares is approximately SEK 60.3 billion or $ 7.2 billion. The total Offer consideration consists of a combination of cash and Mylan Shares. Subject to the potential adjustment to the composition of the Offer consideration as described below, Mylan is offering each Meda shareholder:
in respect of 80 percent of the number of Meda shares tendered by such shareholder, SEK 165 in cash per Meda share; and
in respect of the remaining 20 percent of the number of Meda shares tendered by such shareholder:
(i) if the volume-weighted average sale price per Mylan Share on the NASDAQ Global Select Stock Market for the 20 consecutive trading days ending on and including the second trading day prior to the Offer being declared unconditional is greater than $ 50.74, a number of Mylan Shares per Meda share equal to SEK 165 divided by the Offeror Average Closing Price as converted from USD to SEK at a SEK/USD exchange rate of 8.4158;
(ii) if the Offeror Average Closing Price is greater than $ 30.78 and less than or equal to $ 50.74, 0.386 Mylan Shares per Meda share; or
(iii) if the Offeror Average Closing Price is less than or equal to $ 30.78, a number of Mylan Shares per Meda share equal to SEK 100 divided by the Offeror Average Closing Price as converted from $ to SEK at a SEK/$ exchange rate of 8.4158.
Substantial pre-tax annual operational synergies of approximately $350 million are expected to be achieved by year four after consummation of the Offer.
The transaction is expected to be immediately accretive to Mylan earnings, with accretion increasing significantly after the first full year (2017) as synergies are realized. The transaction creates an opportunity to achieve $0.35 to $0.40 accretion in 2017 and to accelerate achievement of Mylan's previously stated $6.00 in adjusted diluted EPS target in 2017 versus 2018.
Following completion of the acquisition of Meda, Mylan will have an enhanced financial profile with approximately $ 11.8 billion in combined 2015 sales and combined 2015 adjusted EBITDA of approximately $ 3.8 billion.
The combined business will have a balanced portfolio of more than 2,000 products across the branded/specialty, generics and OTC segments, sold in more than 165 markets around the world. The transaction will build on Mylan's recent acquisition of the Abbott non-U.S. developed markets specialty and branded generics business to create an unparalleled European platform for growth - one that is well-positioned to succeed in this dynamic and challenging region. The transaction also consolidates EpiPen® Auto-Injector in Europe, providing greater opportunities to build the brand in this region.
Details: The combination of Mylan and Meda will create a diversified global pharmaceutical leader with an expansive portfolio of branded and generic medicines and a strong and growing portfolio of over-the-counter (OTC) products. The combined company will have a balanced global footprint with significant scale in key geographic markets, particularly the U.S. and Europe. The acquisition of Meda also provides Mylan with entry into a number of emerging markets, including China, Southeast Asia, Russia, the Middle East and Mexico, complemented by Mylan's presence in India, Brazil and Africa. Mylan and Meda have a highly complementary therapeutic presence, which will create a leading global player in respiratory / allergy, and achieve critical mass in dermatology and pain, offering greater opportunities for growth in these categories.
Mylan offers a portfolio of around 1,400 generic pharmaceuticals and several brand medications. In addition, Mylan offers a wide range of antiretroviral therapies, upon which nearly 50% of HIV/AIDS patients in developing countries depend. Mylan markets its products in approximately 165 countries and territories. Mylan's global manufacturing and R&D platform includes more than 50 facilities, and Mylan is one of the world's largest producers of active pharmaceutical ingredients.
Meda is an international specialty pharma company with a broad product portfolio sold in more than 150 countries and 2015 sales of approximately SEK 19.65 billion. Meda employs approximately 4,500 people, including a robust salesforce and marketing organization of more than 2,600. Approximately 60 percent of Meda's product sales are in the prescription area (Rx) and approximately 40 percent are in non-prescription (OTC) products. Approximately half of Meda's revenues derive from products in three key therapeutic areas – respiratory, dermatology and pain. Some of Meda's leading Rx products include Dymista® (allergic rhinitis) and Elidel® (atopic dermatitis); Meda also is Mylan's commercial partner for EpiPen® Auto-Injector in Europe. Meda's leading OTC products include Dona® (osteoarthritis), Saugella® (women's intimate hygiene) and CB12® (halitosis). Meda has a diversified geographic footprint with approximately 62 percent of Meda's sales generated in Western Europe (the largest countries being Italy, Germany, France and Sweden), 19 percent in Emerging Markets (driven by China, Russia, the Middle East and Thailand) and 17 percent in the U.S. Meda has a network of seven manufacturing facilities in Europe, the U.S. and India.
Related: OTC generics
