Just four months after closing its $1.75 billion acquisition of Agila Specialties, generic drug maker Mylan ($MYL) was eyeing another takeover candidate--Sweden's Meda AB, but Meda has spurned its offer.
After news of talks between the two leaked out, Meda confirmed there had been discussions and said it would follow up with a statement today. Brief and to the point, it said: "All continued discussions between Meda and Mylan have been terminated without further actions."
Pennsylvania-based Mylan has said it would continue its buying binge and was looking for targets and Meda is one that makes sense to analysts, Reuters points out. Meda has a strong presence in respiratory and dermatology generics, as well as specialty branded products, such as an allergy-fighting nasal spray that was launched in the U.S. last year. A merger could have expanded Mylan's position in Europe and emerging markets. The two companies combined would bring in about $9 billion in annual revenues, Bloomberg reported, making it half the size of the world's largest generics company, Israel's Teva Pharmaceutical ($TEVA).
The deal would have been the latest in an acquisition binge that has seen Actavis ($ACT) bid $25 billion for Forest Labs, not to mention a frenzy of rumors that both Teva and Pfizer's ($PFE) generics unit are up for sale. When Mylan picked up Agila, it instantly became a leading maker of injectable products, which helped push sales in its specialty drugs unit up 13% in the fourth quarter.
There could have been huge tax advantages to a Mylan-Meda marriage, too. Mylan could have used the deal as an "inversion," relocating its headquarters overseas in order to dodge U.S. tax obligations. As the Financial Times pointed out, such inversions have become so popular that the Obama administration has proposed new rules that would make it more difficult for acquirers to avoid paying domestic taxes.
But Meda said it is not to be, the same position it took last summer when it was reported it was in merger talks with Sun Pharmaceutical.
- here's the Meda statement
- here's the Reuters story
- read more at Bloomberg
- read the Financial Times story (reg. req.)
Special Report: Top 10 generics makers by 2012 revenue - Mylan