Mylan Gets EC Clearance for Meda Purchase
The European Commission on Wednesday gave generic drugmaker Mylan (MYL) - Get Report the nod for its $7 billion-plus purchase of Sweden's Meda after the buyer promised several divestments to ease concerns about competition.
Mylan, a company registered in the Netherlands that's publicly listed in the U.S., secured approval five months after an agreement to buy Meda, which had rejected two proposals from its rival in 2014.
The 60.3 billion Swedish kronor ($7.01 billion) cash-and-stock deal agreed in February was 92% higher than Meda's closing price a day before the announcement.
During their routine, Phase 1 probe of the deal, Brussels antitrust watchdogs had concerns that the deal, as initially planned, would have reduced competition for several pharmaceutical products in 15 European countries. They extended the deadline to study commitments offered by the companies late last month, without opening an in-depth probe that would have added another 90 working days.
The EC studied the effects of the proposed deal on competition several therapeutic areas, including cardio-metabolic, alimentary tract and metabolism, finding that for the majority of the products there were no competition concerns.
But case handlers found 15 markets where there were issues, where companies had strong positions and there was a lack of sufficient alternatives. They included the Portuguese market for multivitamins without minerals for pediatric use sold in Portugal, and eight national markets for antiarrhythmic agents for suppressing abnormal heart rhythms.
On Wednesday, the EC approved the deal after the companies promised to divest activities in Austria, Belgium, Estonia, France, Luxembourg, Ireland, Italy, Norway, Portugal, Spain and the U.K.
"The package of commitments addresses all of the Commissions concerns," the regulator said.
Mylan and Meda combined generated about $11.8 billion. Mylan is looking to the purchase to reduce its dependence on generic drugs with Meda's higher-margin drugs.
Mylan said in February that the acquisition will save about $350 million in annual costs by four years after the tie-up becomes official.
Mylan shares were recently up 3.5% in New York at $46.51. Meda shares had closed only marginally higher in Stockholm.