NEW YORK (AP) - Generic drugmaker Mylan is making official its offer for over-the-counter medicines maker Perrigo despite opposition from a larger rival that wants to buy Mylan.
NEW YORK (AP) — Generic drugmaker Mylan is making official its offer for over-the-counter medicines maker Perrigo despite opposition from a larger rival that wants to buy Mylan.
By buying Perrigo, Mylan hopes to create a company with more than $15 billion in annual sales of specialty and generic drugs, over-the-counter-products, infant formula and vitamins. Teva, the world's biggest generic drug company by revenue, wants to buy Mylan and says the companies could save large amounts on manufacturing and research and development. A combined Teva and Mylan would also dominate the global generic drug market, giving it the leverage to try to raise prices on some products.
Perrigo Co. rejected Mylan NV's offer Tuesday, saying it was too low. Teva went public with an offer to buy Mylan the same day. Teva wants Mylan to drop its offer for Perrigo, and it said Friday that it is committed to buying Mylan.
Mylan said it is disappointed with Perrigo's rejection but still hopes to start talks about combination. The company said last week that it doesn't believe the Teva deal offers a good fit and that regulators probably wouldn't approve it, but said it would review an offer from Teva.
Mylan says Perrigo shareholders would get $60 in cash and 2.2 shares of Mylan stock for every Perrigo share they own. Based on Thursday's closing price, that combination would be worth $222.12 per share, valuing Perrigo at around $32.65 billion. However Mylan says its offer is worth $205 per share, which values Perrigo at $30.14 billion.
Mylan says it could achieve $800 million in pretax savings four years after completing an acquisition of Perrigo. It says the company would benefit from important trends in the pharmaceutical industry, including the increased switching of drugs from prescription to over-the-counter.
Mylan's shareholders would own 61.8 percent of the company.
In morning trading shares of Mylan rose $1.72, or 2.3 percent, to $75.41. The stock is up 24 percent since Mylan went public with its offer for Perrigo, and it's up 33 percent since early March, when rumors about an impending offer from Teva began circulating.
Shares of Perrigo fell $3.87 to $197.76. Teva stock rose 87 cents to $64.12.
Perrigo says it has 147 million shares on the market including stock it issued in March as part of an acquisition.