Industry Trend Analysis - Meda Acquisition Will Expand Mylan's Product And Regional Outlook - MAY 2016

BMI View: Mylan's unsuccessful attempt to acquire Perrigo revealed the company's interest in building up an OTC presence, a strategy Mylan is returning to through these plans to acquire Meda. Unlike Mylan, Meda is a predominantly branded pharmaceutical company with a significant presence in Europe; as a result, there is little overlap between the two firms, making this a complementary acquisition.

Mylan has made an offer to Sweden-based Meda's shareholders to acquire Meda. The offer consideration consists of a combination of cash and Mylan ordinary shares with a value announcement of SEK165 (USD19.6) per Meda share. The total value of the offer for all Meda shares, including Meda net debt, is approximately SEK83.6bn (USD9.9bn), which represents a multiple of around 8.9 times 2015 adjusted EBITDA with synergies.

According to Mylan, the combined company will create a diversified global pharmaceutical leader with an expansive portfolio of branded and generic medicines and a strong and growing portfolio of over-the-counter (OTC) products. The combined company will have a balanced global footprint with significant scale in key geographic markets, particularly those of the US and Europe. Mylan added that acquiring Meda would also provide it with entry into a number of previously untapped emerging markets, including China, Southeast Asia, Russia, the Middle East and Mexico. This will complement Mylan's existing presence in India, Brazil and Africa. Mylan noted that it and Meda have a highly complementary therapeutic presence, which will create a leading global player in respiratory/allergy, and will build a presence in dermatology and pain.

Mylan The Dominant Company
Mylan's Sales vs Meda's Sales (USDmn)
Source: Mylan/Meda

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