Abbott to Sell its Developed Markets Branded Generics Pharmaceuticals Business to Mylan

PR Newswire

ABBOTT PARK, Ill., July 14, 2014 /PRNewswire/ -- Abbott (ABT) announced

today that it will sell its developed markets branded generics pharmaceuticals

business to Mylan for equity ownership of a newly formed entity that will

combine Mylan's existing business andAbbott's developed markets pharmaceuticals

business, and will be a publicly traded company. This represents a value of

approximately$5.3 billion based on Mylan's closing stock price on Friday. The

developed markets portion of this business generated approximately$2 billion in

sales in 2013.Abbott will retain its branded generics pharmaceuticals business

and products in emerging markets.Abbott also retains its other businesses and

products in developed markets.   

"This transaction provides Abbott with additional strategic flexibility as we

continue to actively manage and shape our portfolio, reflecting our commitment

to long-term, durable growth," said Miles D. White, chairman and chief

executive officer,Abbott. "Our branded generics pharmaceuticals business will

focus on emerging markets, where demographic changes and increasing access to

healthcare are expected to drive sustainable growth."

Abbott's Branded Generics Pharmaceuticals Business

Following the closing of the transaction, Abbott's branded generics

pharmaceuticals business will focus in emerging geographies where demographics

and growing healthcare systems are combining to create an increased rate of

patient access to healthcare and where the majority of healthcare products are

paid for by the consumer. The branded generics business that will remain with

Abbott generated 2013 sales of $2.9 billion and is expected to have a sales

growth rate in the upper-single to double digits.    

Transaction Details and Financial Terms

Under the terms of the agreement, Abbott will sell its developed markets

branded generics pharmaceuticals business to Mylan for 105 million shares or

approximately 21 percent, on a fully diluted basis, of a newly formed entity

that will combine Mylan's existing business andAbbott's developed markets

pharmaceuticals business, and will be a publicly traded company.

The business to be sold operates in Europe, Japan, Canada, Australia and New

Zealand and includes approximately 3,800 employees. It includes a broad

portfolio of medicines, as well as manufacturing facilities inFrance and Japan.

Abbott will retain its product portfolio and manufacturing facilities in other

geographies as well as its manufacturing facilities inthe Netherlands, Germany


Following the transaction, which is expected to close in the first quarter of

2015,Abbott expects that its sales growth rate will be 100 basis points higher,

and the growth rate of its ongoing net income will be in excess of 200 basis

points higher. The ongoing net income associated withAbbott's developed markets

pharmaceuticals business is expected to be approximately$0.22 per share in

2015. Accordingly,Abbott's ongoing earnings per share from continuing

operations is expected to be lower following the close of this transaction by

this amount. 

Abbott does not expect to be a long-term shareholder in Mylan and plans

ultimately to redeploy the net proceeds from this transaction to opportunities

that would be accretive to earnings over time.

In May, Abbott announced the acquisition of the Latin American pharmaceutical

company CFR Pharmaceuticals, which is expected to be approximately$0.07

accretive toAbbott's ongoing earnings per share in 2015. 

Abbott expects to report its developed markets branded generics

pharmaceuticals business as Discontinued Operations beginning in the third

quarter 2014.

Morgan Stanley advised Abbott on the transaction.

Abbott Conference Call

Abbott will conduct a special conference call today at 8:30 a.m. Central time

(9:30 a.m. Eastern time) to provide an overview of the transaction. A live

webcast will be accessible throughAbbott's Investor Relations web site at .

About Abbott 

Abbott is a global healthcare company devoted to improving life through the

development of products and technologies that span the breadth of healthcare.

With a portfolio of leading, science-based offerings in diagnostics, medical

devices, nutritionals and branded generic pharmaceuticals,Abbott serves people

in more than 150 countries and employs approximately 69,000 people.

Visit Abbott at , and connect with us

on Twitter at @AbbottNews.

Cautionary Statements Regarding Forward-Looking Information

This communication contains forward-looking statements that are based on

management's current expectations, estimates and projections. Words such as

"expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," 

"forecasts," variations of these words and similar expressions are intended to

identify these forward-looking statements. Certain factors, including but not

limited to those identified under "Item 1A. Risk Factors" in the Annual Report

of Abbott Laboratories ("Abbott") on Form 10-K filed with the Securities and

Exchange Commission (the "SEC") onFebruary 21, 2014, as subsequently amended,

may cause actual results to differ materially from current expectations,

estimates, projections, forecasts and from past results. These forward-looking

statements may also include statements regarding the proposed transaction (the

"Transaction") betweenAbbott and Mylan Inc. ("Mylan"), including the expected

timing of completion of the Transaction and anticipated future financial and

operating performance and results. These statements are based on the current

expectations of management ofAbbott. There are a number of risks and

uncertainties that could cause actual results to differ materially from the

forward-looking statements included in this communication. These risks and

uncertainties include (i) the risk that the companies may be unable to obtain

regulatory approvals required for the Transaction, or that required regulatory

approvals may delay the Transaction or result in the imposition of conditions

that could cause the companies to abandon the Transaction, (ii) the risk that

the stockholders of Mylan may not approve the Transaction, (iii) the risk that

the conditions to the closing of the Transaction may not be satisfied, (iv) the

risk that a material adverse change, event or occurrence may affectAbbott and

Mylan prior to the closing of the Transaction and may delay the Transaction or

cause the companies to abandon the Transaction, (v) the possibility that the

Transaction may involve unexpected costs, liabilities or delays, (vi) the risk

that the businesses of the companies may suffer as a result of uncertainty

surrounding the Transaction, and (vii) the risk that disruptions from the

Transaction will harm relationships with customers, employees and suppliers. No

assurance can be made that any expectation, estimate or projection contained in

a forward-looking statement will be achieved or will not be affected by the

factors cited above or other future events.

Readers are cautioned not to place undue reliance on these forward-looking

statements, which speak only as of the date of this communication.Abbott does

not undertake, and expressly disclaims, any duty to update any forward-looking

statement whether as a result of new information, future events or changes in

expectations, except as required by law.

Additional Information and Where to Find it

In connection with the proposed Transaction, a newly-formed Netherlands public

limited liability company ("New Mylan") will file with the SEC a registration

statement that includes a preliminary prospectus regarding the Transaction and

Mylan will file with the SEC a proxy statement with respect to a special

meeting of its shareholders to be convened to approve the Transaction. The

definitive proxy statement/prospectus will be mailed to the shareholders of





Investors will be able to obtain these materials, when they are available,

and other documents filed with the SEC free of charge at the SEC's website, . In addition, copies of the registration

statement and proxy statement, when they become available, may be obtained free

of charge by accessing Mylan's website

or by writing Mylan at 1000 Mylan Boulevard,

Canonsburg, Pennsylvania 15317, Attention: Investor Relations. Investors may

also read and copy any reports, statements and other information filed byAbbott

and Mylan with the SEC, at the SEC public reference room at 100 F Street, N.E.,

Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the

SEC's website for further information on its public reference room.

Participants in the Merger Solicitation

Mylan and certain of its directors, executive officers and other members of

management and employees may be deemed to be participants in the solicitation

of proxies in respect of the Transaction. Information regarding Mylan's

directors and executive officers is available in its proxy statement filed with

the SEC by Mylan onMarch 10, 2014, in connection with its 2014 annual meeting

of shareholders. Other information regarding the participants in the proxy

solicitation and a description of their direct and indirect interests, by

security holdings or otherwise, will be contained in the registration statement

and proxy statement/prospectus and other relevant materials to be filed with

the SEC when they become available.


This communication does not constitute an offer to sell or the solicitation of

an offer to buy any securities, nor shall there be any sale of securities in

any jurisdiction in which such offer, solicitation or sale would be unlawful

prior to registration or qualification under the securities laws of any such


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