A few potential deals have already caved under the weight of new U.S. tax rules that discourage inversion deals. Not Mylan's. The company ($MYL) is pushing ahead with a $5.3 billion plan to buy a piece of Abbott Laboratories' ($ABT) overseas generics business--with a few edits, of course.
The companies have tweaked the transaction to include better pricing terms for Mylan at Abbott units that will manufacture and supply products for the Pennsylvania drugmaker, Reuters reports. Mylan will also issue 110 million shares in the newly formed company to Abbott, an increase of about 5 million over the original terms.
Companies have been doubling back to take a hard look at their deal structures ever since the U.S. Treasury altered its corporate tax rules last month. Now, it's more difficult for American companies to reap tax benefits from overseas buyouts, and some buyers have decided that without those, their pickups aren't worth the price.
So far, AbbVie ($ABBV) has triggered the highest-profile divorce, pulling the plug on a $55 billion takeover of Ireland's Shire ($SHPG). The U.S. tax changes "introduced an unacceptable level of uncertainty to the transaction," it said, rendering the merger a no-go. But the Illinois pharma won't get off scot-free: It's forking over a $1.64 billion breakup fee for backing out.
Mylan, though, believes in the payoff that lies ahead. With $2 billion in annual sales, the products it's buying will buoy its top line by nearly 30%, it said in July. Those include 100 branded and generic meds that will beef up the company's ops in developed countries outside the U.S. And Mylan will get Abbott's commercial infrastructure in a bevy of countries, too, putting its own drugs--like EpiPen--in line for a sales boost.
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