Abbott will retain its branded generics pharmaceuticals business in emerging markets
Generic drug manufacturer Mylan is to buy Abbott Laboratories' branded generics pharmaceuticals business outside the US in an all-stock deal worth about US$5.3bn.
Under the transaction, Abbott will take a 21% stake in a new public company that will combine Mylan's existing business with Abbott's developed markets pharmaceuticals business in Europe, Japan, Canada, Australia and New Zealand. The developed markets portion of this business generated approximately $2bn in sales in 2013.
The deal gives Mylan access to Abbott's key products such as gastroenterology drug Creon, pain drug Brufen and flu vaccine Influvac.
Abbott will retain its branded generics pharmaceuticals business and products in emerging markets. The company will also keep its other businesses and products in developed markets.
'We have been actively looking at a wide range of opportunities, and the acquisition of this business is absolutely the right next strategic transaction for Mylan as it builds on our strong momentum, expands and further diversifies our business in our largest markets outside the US, and clearly positions Mylan for the next phase of growth through enhanced financial flexibility and a more competitive global tax structure,' said Robert Coury, Mylan Executive Chairman.
The acquisition of this business is absolutely the right next strategic transaction for Mylan
The deal, which is expected to close in the first quarter of 2015, will roughly double Mylan's revenue in Europe and generate additional revenue of about $1.9bn in annual revenue, Mylan said.
After completion, Abbott will focus its generic drug business on emerging markets 'where there is greater opportunity for growth'. The business that remains with Abbott generated sales of $2.9bn in 2013.
'This transaction provides Abbott with additional strategic flexibility as we continue to actively manage and shape our portfolio, reflecting our commitment to long-term, durable growth,' said Miles White, Chairman and Chief Executive of Abbott.
'Our branded generics pharmaceuticals business will focus on emerging markets, where demographic changes and increasing access to healthcare are expected to drive sustainable growth.'
The business to be sold to Mylan employs around 3,800 people. It includes a broad portfolio of medicines, as well as manufacturing facilities in France and Japan.
Abbott will retain its product portfolio and manufacturing facilities in other geographies as well as its manufacturing facilities in the Netherlands, Germany and Canada.
Abbott said it did not intend to be a long-term shareholder in Mylan and would seek to sell its stake in the future.