NEW YORK (The Deal) -- Mylan (MYL) made public on Wednesday that it had made a proposal to acquire Perrigo Company (PRGO) in a deal valued at $205 per share in cash and stock, or close to $29 billion.
Under the terms of the proposal, which was delivered to Perrigo's chairman on Monday, shareholders would receive a 25% premium to Perrigo's trading price as of the close of business April 3. The price represents a 28% premium to Perrigo's 90-day average trading price, according to a statement by Mylan. Ordinary shares of Perrigo were trading around $197 in mid-day trading, following the announcement.
Dublin-based Perrigo, which has long been viewed as a potential acquisition target, specializes in the development, manufacturing and distribution of over-the-counter and generic prescription drugs, infant formula, nutritional products, animal health products, dietary supplements, active pharmaceutical ingredients and medical diagnostic products, according to the company's website. It also receives royalties from multiple sclerosis drug Tysabri.
Last year, Perrigo purchased Belgium's Omega Pharma for $4.5 billion in order to expand its over-the-counter medicine offerings. In November, Perrigo noted that it raised $870.8 million after expenses through a share-issue fund to help finance the purchase of Omega.
"This proposal is the culmination of a number of prior discussions between Mylan and Perrigo about the compelling strategic and financial logic of this combination. This combination would result in meaningful immediate and long-term value creation, and our proposal is designed to deliver that value to shareholders and other stakeholders of both companies," said Mylan Executive Chairman Robert Coury in a statement. "We have great respect for Perrigo's board and management team and what they have built. We look forward in the weeks ahead to working with them to capitalize on this tremendous opportunity and working together to create a unique leader with a one-of-a-kind profile in our industry."
According to a note sent to Perrigo CEO and Chairman Joseph C. Papa, the two companies have had many conversations over the years, and share similar cultures and core values. Mylan noted that the combined companies would have approximately $15.3 billion in 2014 pro forma sales, as well as greater opportunities for strategic acquisitions and synergies that would result in operating margin expansion and earnings per share accretion.
The proposal -- which was preliminary and a non-binding indication of interest -- was filed under Irish takeover law. As a result, there is no certainty that an offer will be made. If an offer is made, a further statement by the companies will be provided.
Hertfordshire, U.K.-based Mylan specializes in generics and specialty pharmaceuticals. Shares of Mylan hovered around $67.60 in mid-day trading. Mylan has a market cap of around $33.2 billion.
Earlier this year Mylan purchased Mumbai, India-based Famy Care Ltd.'s female health business for $750 million in cash. In January, the European Commission approved Mylan's $5.3 billion stock deal for Abbott Laboratories' (ABT) developed markets generic business, completing an inversion transaction.
There have been a number of big deals in the pharmaceutical sector already this year. Last month, Abbvie (ABBV) announced it would purchase Pharmacyclics (PCYC) for $21 billion, and Canada's Concordia Healthcare agreed to purchase some assets from privately held Covis Pharma for $1.2 billion. Earlier this year, Valeant Pharmaceuticals (VRX) made a $14.5 billion deal for Salix Pharmaceuticals (SLXP), and Irish drugmaker Shire agreed to purchase NPS Pharmaceuticals (NPSP) for $5.2 billion.