Mylan Laboratories has completed its previously-announced 4.9 billion euro acquisition of Merck KGaA's generics business, a deal which strengthens its position as one of the top three firms in the sector.
Robert Coury, Mylan's chief executive, said that the new entity, which will now be known simply as Mylan Inc, “has all of the critical attributes we need to ensure future success and deliver powerful growth”, adding that “we have enhanced scale and stability, a truly global reach, vertical and horizontal integration, and breadth and depth in our management team”.
He noted that the acquisition significantly reduces risks related to any one particular market or product for his firm which has until now only had a significant presence in the USA. Mr Coury went on to say that the Merck generics business “is even stronger than we expected” and “after months of careful preparation, we have hit the ground running with the integration of our businesses.” He concluded by noting that “we will be operating as a single, integrated company from day one."
The new group now employs more than 11,000 people and has a presence in more than 90 countries, offering more than 570 products. Its pipeline contains some 255 applications or dossiers pending regulatory approval and Mylan said that it will benefit from “substantial operational efficiencies and economies of scale”, adding that Dey, which was Merck’s specialty pharmaceuticals business in the USA, “brings additional exciting and diversified opportunities through its existing strengths in the respiratory arena”.
After the deal was first announced in May, some analysts believed that the price is on the high side but there is no doubting that the generics unit was much sought-after. Mylan beat off the likes of Teva Pharmaceutical Industries and Novartis’ Sandoz unit to pull off the deal. Mylan has said that the transaction is anticipated to be dilutive to cash earnings per share in year one, breakeven in year two, and significantly accretive thereafter. It expects to achieve synergies of approximately $250 million by the end of the third year and this should be achieved without significant reductions in headcount.