| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 After it failed to win German birth-control maker Schering AG in 2006, drug titan Merck KGaA put its generics division on the block and has sold it to Mylan Laboratories Inc. for $6.6 billion. The deal nearly triples Pittsburgh-based Mylan Labs' revenue. First round bids reportedly came due March 8 for the unit, which at the time was believed to go for up to $6.1 billion, according to some estimates. Citing a report in India's Economic Times, Reuters said March 16 Barr Pharmaceuticals Inc. and Germany's Stada Arzneimittel AG are out of the running. On the short list, it seemed, were Ranbaxy Laboratories of India, Israeli Teva Pharmaceutical Industries Ltd, Iceland's Actavis and Mylan Labs.
But the unit didn't deter private equity eyes--Carlyle Group, Kohlberg Kravis Roberts & Co. and Warburg Pincus were reportedly eying the unit, while Bain Capital and Apax Partners are also said to be teaming up for a bid. Auction buzz first surfaced Jan. 4 and Merck confirmed a day later that it was indeed considering a sale. Merck had hoped to close a sale by mid-year, Reuters said in March. The sale proceeds will help pay for Merck's $13.3 billion purchase of Switzerland biotech Serono SA last year. A divestiture is strategic, wrote The Deal's Andrew Bulkeley in January: "Off-patent medicines command a large -- and expanding -- portion of the pharmaceuticals market, but they carry small margins and tie up cash that pharmaceuticals groups such as Merck need for developing blockbuster drugs. Novartis kicked off this round of consolidation two years ago with the $16 billion purchase of Germany's Hexal AG and sister U.S. business Eon Labs Inc." A go at the unit wouldn't have been the first such for KKR. Alongside Blackstone Group LP last year, the firm was left empty-handed in the auction for Croatian generics maker Pliva d.d. In the final bidding round, Woodcliff Lake, N.J.-based Barr Pharmaceuticals Inc. beat out Iceland's Actavis Group hf and acquired the company for $2.5 billion. ALL'S FAIR The auction follows a lengthy bidding war in which Merck went head-to-head with Bayer AG for Schering, ultimately losing out to a sweetened, $21.7 billion bid. It looked like Merck KGaA had ended its pursuit of the German birth-control maker in mid-June, clearing the way for Bayer AG's $20.6 billion takeover of the highly coveted target by agreeing to sell the rival its stake for $4.7 billion. But as of July 12, Bayer failed to hit its squeeze-out target after its $21.7 billion (increased to €89 a share from €86 a share, after a last-ditch effort from Merck to grab the company) bid landed the drugmaker with 92.4% of its target. Bayer is still working on the squeeze out. STOCK PILING While Leverkusen, Germany-based Bayer was set to close its $20.6 billion white knight offer for Berlin-based Schering, uber-hostile Darmstadt, Germany-based Merck was well on its way to buying up 30% of the target's shares, which, under German takeover law, would have required it to make an offer for the entire company. The triangular relationship of the German drugmakers has seen months of activity.
Categories Deal Video
    Community
 Elsewhere on The Deal.comDealwatchThe Deal MagazineCorporate Dealmaker
The Deal VideoCategories
Blog roll
Archives
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
