Mylan ups ante in three-way drug company tussle

NEW YORK - Generic drugmaker Mylan is making official its offer for over-the-counter medicine maker Perrigo as it remains at the center of a three-way battle: Mylan wants to buy Perrigo, and a larger rival - Teva - wants to buy Mylan.

Perrigo rejected Mylan's offer Tuesday and reiterated Friday that it felt the offer, worth more than $30 billion, was too low. Meanwhile, Teva, which is based in Israel and has facilities around Philadelphia, said Friday it was committed to acquiring Mylan, which has expressed skepticism about Teva's plan. Teva says it's offering $40.1 billion for Mylan.

Though Mylan officially moved to the Netherlands last year to pay less in U.S. corporate taxes, its operational headquarters remains in Canonsburg, near Pittsburgh.

By buying Perrigo, Mylan hopes to create a company with more than $15 billion in annual sales of generic drugs and products such as over-the-counter medicines, infant formula, and vitamins. It says the company would benefit as some medicines are switching from prescription-only to over the counter. Teva, already the world's biggest generic drug company by revenue, wants to become even more dominant by buying Mylan and says the companies could save money by combining their manufacturing and research-and-development operations.

A combined Teva and Mylan would also have the leverage to try to raise prices on some generic drugs. The two companies have about $30 billion in combined annual sales, although regulators will likely require Teva to sell off some businesses before they approve that deal. Teva's offer requires Mylan to end its bid for Perrigo.

Mylan also sells the EpiPen Auto Injector, an emergency treatment for allergic reactions. Teva sells treatments for Alzheimer's disease, multiple sclerosis, cancer, and respiratory ailments.

If either deal goes through, it will be one of the largest entries in a cycle of increasing consolidation among generic-drug companies. Mylan and Teva have expanded rapidly over the years, moving into new markets with deals. Perrigo, too, has boosted its revenue with big deals, and, like Mylan and Perrigo, recently relocated to Europe to reduce its tax bill.

Mylan said last week that it did not believe the Teva deal offered a good fit and that regulators probably wouldn't approve it. Nevertheless, it said it would review an offer from Teva. Its stock has risen 24 percent since Mylan went public with its offer for Perrigo on April 8, and it's up 33 percent since March 10.

Teva's bid for Mylan is worth $82 per share in cash and stock.

Mylan says Perrigo shareholders would get $60 in cash and 2.2 shares of Mylan stock for every Perrigo share they own. Based on Thursday's closing price, that combination would be worth $222.12 per share, valuing Perrigo at around $32.65 billion. However, Mylan says its offer is worth $205 per share, which values Perrigo at $30.14 billion. Perrigo says the offer is worth less than that because speculation about Teva's offer drove up the price of Mylan stock. Mylan says it could achieve $800 million in pretax savings four years after completing an acquisition of Perrigo.