FTC Clears Mylan’s $7.2 Billion Acquisition of MedaBy
The US Federal Trade Commission (FTC) has cleared Mylan’s proposed $7.2 billion acquisition of Meda Aktiebolag, a Swedish pharmaceutical company, subject to Mylan’s divestiture of certain products. The FTC clearance represents the final regulatory clearance required to complete Mylan’s offer, and Mylan has now received all antitrust regulatory clearances required to acquire Meda.
In granting its okay for the deal, the FTC is requiring Mylan to divest three products: 250-mg generic carisoprodol tablets, which treat muscle spasms and stiffness, and for 400-mg and 600-mg generic felbamate tablets, an anticonvulsant. Under the proposed FTC order, the US-based generic pharmaceutical company, Alvogen Pharma US, will acquire all of Mylan's rights and assets related to 400-mg and 600-mg felbamate tablets. The proposed order also requires Mylan to provide transitional services and take all actions that are necessary for Alvogen to obtain US Food and Drug Administration approval to manufacture and market 400-mg and 600-mg generic felbamate tablets.
With respect to 250-mg generic carisoprodol tablets, under the proposed order, Mylan must relinquish its US marketing rights for the drug. With the settlement, Indicus Pharma LLC, which owns the product, manufactures it, and markets it internationally, will compete independently in the US market. According to the FTC, Meda and one other company currently market 250-mg generic carisoprodol tablets, and Mylan, which owns the US marketing rights to a recently approved carisoprodol product, is the next likely entrant. Without a remedy, the acquisition would eliminate Mylan's entry as a third independent competitor.
Mylan launched its recommended public offer to the shareholders of Meda on June 17, 2016 to tender all their shares in Meda to Mylan. Mylan first proposed its acquisition for Meda earlier this year with a proposal to acquire all the shares in Meda to Mylan for SEK 165 ($19.5) per Meda share for a total equity value of approximately SEK 60.3 billion ($7.2 billion). The total value of the offer for all Meda shares, including Meda net debt, is approximately SEK 83.6 ($9.9 billion). The acceptance period for the offer runs up to and including July 29, 2016. Mylan reserves the right to extend the acceptance period.
Meda had 2015 sales of approximately SEK 19.65 billion ($2.3 billion). Meda employs approximately 4,500 people, including a salesforce and marketing organization of more than 2,600. Approximately 60% of Meda’s product sales are in the prescription area and approximately 40% are in non-prescription or over-the-counter (OTC) products. Approximately half of Meda’s revenues derive from products in three key therapeutic areas: respiratory, dermatology, and pain. Approximately 62% of Meda’s sales are generated in Western Europe (the largest countries being Italy, Germany, France and Sweden), 19% in emerging markets (driven by China, Russia, the Middle East and Thailand), and 17% in the US. Meda has a network of seven manufacturing facilities in Europe, the US and India.
Following Mylan’s completion of the acquisition of Meda, the combined company would have 2015 sales of approximately $11.8 billion. The combination of Mylan and Meda creates a company positioned in branded, generic, and OTC products, which include a combined approximate $1 billion OTC portfolio. The combined business would have a portfolio of more than 2,000 products across the branded/specialty, generics, and OTC segments, sold in more than 165 markets. The acquisition provides Mylan with entry into a number of emerging markets, including China, Southeast Asia, Russia, the Middle East and Mexico, complemented by Mylan’s presence in India, Brazil and Africa. Mylan and Meda have complementary therapeutic areas, such as in respiratory/allergy and a growing combined presence in dermatology and pain.