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Mylan, Pfizer merger delayed due to Covid-19 outbreak
Posted on Thursday, 26 March 2020 15:20
The planned combination of drug manufacturers Mylan and Pfizer has been put on ice due to the ongoing coronavirus outbreak.
Terms had previously been agreed in July of last year which would see Pfizer spin-off its off-patent branded drugs unit into a new company called Upjohn. This firm would then be acquired by Mylan, via its Viatris unit, in a Reverse Morris Trust transaction.
Upon completion, Pfizer would own 57.0 per cent of Upjohn, with Mylan’s investors to hold the balance.
The combination can be valued at EUR 12.62 billion, based on Mylan’s closing share price on 26th July 2019, the last trading day prior to the deal being announced.
As a result of the global Covid-19 pandemic, the expected completion date for the transaction has been adjusted and closing is now expected to take place during the second half of this year.
Mylan was due to hold a general meeting of shareholders to approve the transaction, but restrictions on large gatherings mean this has now been delayed until 30th June.
The terms of the deal have not otherwise changed.
Following completion, the enlarged business is expected to generate revenue of between USD 19.00 billion and USD 20.00 billion in 2020.
Reuters noted that combining the two companies will bring Pfizer’s Viagra and Lipitor products into the same range as Mylan’s EpiPen.
In total, there were 2,314 deals worth a combined USD 272.35 billion targeting pharmaceutical preparation manufacturers announced worldwide during 2019, according to Zephyr, the M&A database published by Bureau van Dijk.
The Pfizer/Mylan combination was the sector’s third-largest deal of the year.
Zephyr shows it was trumped by the EUR 66.80 billion takeover of Celgene by Bristol-Myers Squibb, as well as AbbVie’s EUR 55.74 billion purchase of Allergan.
Those transactions were announced in January 2019 and June 2019, respectively.
© Zephus Ltd