Perrigo acquires GSK products as Mylan hovers
This article was originally published in Scrip
Irish-headquartered Perrigo, the subject of a recent unwilling takeover offer from Mylan, is to buy a portfolio of over-the-counter (OTC) brands from GlaxoSmithKline's Consumer Healthcare business. The deal is in connection with commitments that GSK made to the EC and other regulators ahead of the formation of the consumer health joint venture between GSK and Novartis, part of the mega asset swap deal that closed in February this year.
Perrigo will acquire the following assets in an all-cash transaction; the purchase price was not disclosed.
?GSK's NiQuitin nicotine replacement therapy (NRT) business, primarily in the European Economic Area (EEA) and Brazil, and Novartis's legacy Australian NRT business, including the Nicotinell brand;
?Several assorted OTC brands including Coldrex (cold and flu treatment) across the EEA, and Panodil (pain relief), Nezeril (nasal decongestant), and Nasin (nasal decongestant) in Sweden;
?Novartis's legacy cold sore management products primarily in the EEA, marketed under the brand names Vectavir, Pencivir, Fenivir, Fenlips and Vectatone.
"We are building on the global platform we established with the Omega Pharma acquisition to capture an even greater share of the $30bn European OTC market opportunity with several well-established, complementary brands that bolster our OTC product portfolio," said Perrigo chairman, president and CEO Joseph Papa.
Perrigo is caught up in M&A triangle with Mylan and Teva.
Teva has been chasing an unwilling Mylan, which in turn made an unsolicited offer for Perrigo for $205.00 per share, or $29bn, at the start of April. The offer, which was made privately on 6 April, was a 25% premium to Perrigo's closing price of $163.73 on 2 April. Perrigo announced on 21 April that Mylan's offer "substantially undervalues Perrigo's differentiated global business" and that the deal "does not take into account Perrigo's innovative new product pipeline, which is expected to generate nearly $1bn in net sales over the next three years."
On 29 April, Perrigo said it had rejected a second offer from Mylan, this for $75.00 plus 2.3 Mylan shares for each Perrigo share, saying it was at a price lower than the previously rejected proposal. "Based on Mylan's unaffected price of $55.31 per share on 10 March, the last day of trading prior to widespread public speculation that Teva was considering an offer for Mylan, the value of the revised offer is $202.20 per Perrigo share."
Perrigo has implied that there is a price at which the deal might happen, but Mylan has a way to go before it reaches it.
The acquisition of the GSK products is expected to be immediately accretive to Perrigo's calendar 2015 adjusted EPS, excluding certain costs. It is expected to close in the third quarter of 2015, pending approval by the EC, the Australian Competition and Consumer Commission, and Brazil's Council for Economic Defense, and other customary closing conditions.
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