May 15, 2007
Mylan emerges as victor for Merck KGaA generics business
Mylan struck a deal over the weekend to acquire Merck KGaA’s generics business for $6.7 billion in cash.
The transaction is expected to close in the second half of this year.
The agreement creates a global generics business with a presence in most of the important global generics markets and a portfolio of 560 products. The new company, with about 10,000 employees, would have had combined revenues of $4.2 billion in 2006.
Merck Generics, a subsidiary of Merck KGaA, was the world’s No. 3 generics business by revenue in 2006, reporting earnings of $450 million. That’s an increase of 29% from the previous year, on sales of $2.45 billion. The business employs about 5,000 people worldwide, according to Mylan and Merck KGaA. Merck Generics’ US specialty pharmaceuticals business, Dey, focuses on respiratory and allergy products and had $650 million in revenues in 2006.
At least five bidders had been vying for the generics operation, including other generics firms and private equity. Teva Pharmaceuticals, the world’s biggest generics firm, was among the losing bidders.
The German Merck bought Swiss biotech company Serono SA for $13.3 billion this year and was said to be under pressure to cut debt.