Dutch or American? In takeover drama, Mylan seems to want it both ways
- In February, Mylan completed a tax-inversion deal that relocated its corporate headquarters to the Netherlands.
- Mylan is trying to protect itself from Teva's $40.1 billion hostile takeover effort by invoking anti-trust protection from the U.S. government.
- Many think that Mylan is trying to have it both ways by enjoying tax benefits in the Netherlands and anti-trust protection in the U.S.
Teva's current stratey is to acquire a critical percentage of Mylan's shares (a 4.61% stake), so that it can have a strong voting position and vote against Mylan being able to acquire Perrigo (it has acquired this stake). However, Mylan says it should enjoy the protection of the U.S. Federal Trade Commission (FTC), because its principal offices are in Canonsburg, PA. If this happened, Teva would have to be cleared by the FTC in order to acquire additional shares of Mylan, and would have to deal with anti-trust regulations before being able to acquire Mylan.
Teva, however, contends that Mylan is a Dutch company. According to federal guidelines, foreign companies can acquire non-controlling positions in foreign companies without FTC pushback. Therefore, Teva is taking the case to a Dutch court.
There's a lot at stake here: If Teva succeeds in its quest to buy Mylan, Teva will end up controlling roughly 25% of the generics industry.