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
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
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
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 www.abbott.com
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
Mylan. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUTABBOTT'S
DEVELOPED MARKETS PHARMACEUTICALS BUSINESS, MYLAN AND THE TRANSACTION.
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,
statement and proxy statement, when they become available, may be obtained free
of charge by accessing Mylan's website atwww.mylan.com/investors
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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