Mylan Goes Ahead With Abbott Merger, Reincorporation in Netherlands
Generics giant Mylan confirmed its intention to merge with Abbott Laboratories and reincorporate in the Netherlands early next year, a move that comes as other U.S. pharma companies have abandoned their plans to move overseas in the face of new U.S. tax rules.
In a SEC filing, Mylan disclosed slightly revised terms for the $5.3 billion deal, under which the Pennsylvania-based firm will acquire Abbott’s overseas branded generics business in developed markets. Mylan will acquire Abbott products in therapeutic areas such as cardiac/metabolic, gastrointestinal, anti-infective, respiratory, central nervous system, pain and women’s and men’s health.
Under the revised terms, for example, Mylan will increase from 105 million to 110 million the number of shares it will issue in the new company, to be called “New Mylan.”
Mylan said the deal, which is expected to close in the first quarter of 2015, will boost its market presence outside the U.S. by adding brands such as digestive aids Creon (pancrelipase) and Amitiza (lubiprostone) and testostone gel Androgel.
For Abbott, the deal will allow the company to focus on emerging markets, which are set to grow by a factor of 1.5 over the next five years, spokesman Scott Stoffel said. Emerging markets now account for roughly 40 percent of Abbott’s sales, a figure that should soon rise to 50 percent, Stoffel says.
The move comes as other drugmakers have given up on plans to reincorporate overseas. U.S. officials have blasted the deals as an attempt to evade U.S. taxes. AbbVie this week called off plans to merge with Ireland-based Shire, citing the U.S. Treasury Department’s recent efforts to dissuade the so-called tax inversions.
Pharma and other companies have complained the U.S. corporate tax rate of 40 percent is too high. By contrast, the corporate tax rate in the Netherlands is 25 percent, according to tax advisory firm KPMG. — Lena Freund
Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.