Mylan Looking at Takeover of Swedish Drug Maker Meda AB
Mylan Inc. MYL -1.79% is looking at buying Swedish drug maker Meda MEDA-A.SK -0.67% AB, according to people familiar with the matter, in what would be the pharmaceutical industry's latest tie-up that could lower a U.S. company's taxes.
Executives at Mylan, which has a $18.5 billion market capitalization, have been open about doing a big acquisition. When announcing its fourth-quarter earnings in February, the company said it expected to do a "substantial deal" this year.
Canonsburg, Pa.-based Mylan has been working with advisers on the possible deal, one of the people said. Mylan's interest in Meda, with a market capitalization of about $4.5 billion, was first reported by the Financial Times.
Last year, Mylan had $6.9 billion in sales. Many of Mylan's products are generic versions of brand-name drugs. But it is best known for its own branded product EpiPen, an emergency treatment for allergic reactions.
Pharmaceutical companies like Mylan have been heavily acquisitive in recent years amid heightened competition, pricing pressures and fewer brand-name blockbuster drugs losing U.S. patent protection. And investors have rewarded deals, most recently Actavis ACT -0.86% PLC's $25 billion deal to buy Forest Laboratories Inc. FRX -0.57%
In recent years, several companies, including Actavis, Perrigo Co. PRGO -2.82% PLC and Valeant Pharmaceuticals International Inc., VRX.T -3.68% have bought companies in countries with lower tax rates than the U.S., such as Ireland.
Mylan estimated a tax rate of 24% to 26% this year. U.S.-based Perrigo said it could lower its rate to 17% within 12 to 18 months after closing its $8.6 billion deal to buy Ireland-based Elan, according to Moody's Investors Service.
Meda sells a variety of drugs, including treatments for rheumatoid arthritis, women's health conditions and respiratory disorders.