A tale of 2 takeover bids: Teva-Mylan-Perrigo M&A drama goes hostile
- Generics manufacturers Teva, Mylan, and Perrigo are locked in two separate hostile takeover bids. So far, nobody involved seems willing to bite.
- Teva, which is the largest generics company in the world, is pursuing acquisition of Mylan, with an offer price of roughly $40 billion. The bid is unsolicited and Mylan's CEO has said his company's not interested.
- Mylan, which is based on the Netherlands, is offering $222 per share, or about $31 billion, for Perrigo and has decided to take its bid hostile, approaching shareholders directly about the potential deal. Perrigo's board has already rejected Mylan's offer.
The numbers are flying as Mylan bids for Perrigo and Teva bids for Mylan. It's still not clear what the precise dollar value/number of shares breakdown will be in any of the buy-out situations, because everything is still in flux. Teva has reiterated its commitment to its offer for Mylan and its intention to follow through, while Mylan has stated its intention to take its offer for Perrigo directly to shareholders. This activity is all part of a larger trend—an acceleration of last year's M&A frenzy. So far, M&As in the industry has hit $193.9 billion this year.
There is another important angle to this story, however. If the Teva merger goes through, Teva will control 25% of the generic pharma industry, including several drugs that are currently in short supply. The downstream implications of this are that Teva may run up against anti-trust laws and the drugs that are in short supply could spike in price.
To Teva's credit, the company is proactively addressing the issue with the FTC to avoid anti-trust issues, assuming the merger goes through.