ST. ALBANS/GEORGIA — Mylan announced Tuesday that the U.S. Federal Trade Commission (FTC) cleared its proposal to acquire Perrigo Company.
Both companies have plants locally that collectively employ about 900 people. Mylan is based in the Netherlands and Perrigo Co. is headquartered in Ireland. Both recently moved to Europe from the U.S. in transactions that reduced their tax obligations.
Perrigo has encouraged its stockholders not to approve the sale to Mylan.
According to an FTC report released yesterday, the transaction was only approved because Mylan (and tentatively in the future, Perrigo,) agreed to sell the rights and assets related to seven generic drugs to prevent anti-competitive practices.
They include four drugs already approved for sale by the U.S. Food and Drug Administration, and three cases in which Mylan and/or Perrigo would likely submit entrants into a future market:
- Bromocriptine mesylate, used to treat conditions including type 2 diabetes and Parkinson’s disease
- Clindamycin phosphate/benzoyl peroxide, used to treat acne.
- Liothyronine sodium, used to treat hypothyroidism and to treat or prevent enlarged thyroid glands.
- Polyethylene glycol 3350, a laxative used to treat occasional constipation.
- Acyclovir, used to slow the growth and spread of the herpes virus in the body.
- Hydromorphone hydrochloride, used to treat moderate to severe pain in narcotic-tolerant patients.
- Scopolamine, which prevents symptoms associated with motion sickness and helps patients recover from anesthesia and surgery.
The drugs are proposed to be bought by Alvogen, an international pharmaceutical company. Mylan will have to initially provide technical and other transition assistance.
The FTC clearance is the last hurdle Mylan faced before going through with the acquisition. Mylan in April proposed an offer of almost $29 million, or $205 per share, to buy Perrigo. However, Perrigo executives quickly rejected the offer as too low.
In September, Mylan announced it would take its offer directly to shareholders. Under the terms of the offer, Perrigo shareholders would receive $75 in cash and 2.3 Mylan ordinary shares for each Perrigo ordinary share. Perrigo shareholders would own approximately 40 percent of the combined company upon completion of the transaction.
Perrigo has tried to sway shareholders away from the offer. In it’s most recent press release about the matter on Oct. 30, the company said it “continues to strongly recommend that its shareholders not tender into Mylan’s inadequate offer. We remain confident that our shareholders will not be fooled and will reject this inadequate offer in favor of Perrigo’s superior long-term growth prospects.”
Mylan, however, is continuing on an optimistic note about the acquisition.
“We are delighted to have received FTC clearance, making our offer for Perrigo now unconditional other than the one final step, which now rests solely in the hands of Perrigo shareholders,” Mylan’s Executive Chairman Robert J. Coury said in yesterday’s press release. “We are very confident that Perrigo shareholders will support this transaction.”
In order for the offer to be complete, at least 50 percent of Perrigo shareholders will have to tender their shares by 8 a.m. on Friday, Nov. 13, when the offer and withdrawal rights expire.
The effect, if any, of the takeover on local employees at Perrigo infant formula production plant in Georgia and the Mylan Technologies pharmaceutical manufacturing plant in St. Albans City remains to be seen. About 300 employees work at the Georgia facility and around 600 people are employed by Mylan.
Mylan itself successfully resisted a takeover attempt by Teva Pharmaceutical Industries Ltd, of Israel, earlier this year.