Pharmaceutical giant Teva has made a $40 billion offer for the drug manufacturer Mylan N.V. If the acquisition goes through, it will be the largest Israeli business deal ever. Teva has offered $20 billion in cash and another $20 billion in company stock. If the purchase is completed, it will allow Teva to expand its activity. The two companies would have a combined 400 short-listed drug requests with the U.S. Food and Drug Administration, and another 80 submitted for the first time, which are more significant for their profits. According to estimates, the acquisition would allow Teva to eliminate some of the increasing competition for the multiple sclerosis drug Copaxone, because Mylan has developed a rival version of Teva's successful medication. The two companies' combined revenue would comprise some $30 billion annually, and their earnings before interest, taxes, depreciation, and amortization would stand at some $9 billion per year. Teva estimates that the deal could save both companies some $2 billion per year through efficiency measures and tax benefits. Teva CEO Erez Vigodman approaches Mylan executive chairman Robert J. Coury about the deal, saying he was certain that a merger would provide "strategic and financial advantages for both companies." According to Vigodman, both Teva and Mylan have already been recognized as leaders in the field of high-quality accessible medications throughout the world, and the companies merging could make them more so. However, it remains uncertain whether the deal will go through. Last Friday, Mylan expressed some reluctance to the acquisition. The company said in a press release that it had examined the proposal and believed that "it is clear that such a combination is without sound industrial logic or cultural fit." Vigodman said on Tuesday that Teva's offer was "compelling" for both Mylan and Teva shareholders. "Our proposal would provide Teva stockholders with very attractive strategic and financial benefits and Mylan stockholders with a substantial premium and immediate value for their shares, as well as the opportunity to participate in the significant upside potential of the combined company -- one that would transform the global generics space and leverage it to hold a unique leadership position in the pharmaceutical industry," Vigodman said. Despite the misgivings Mylan expressed, the company also said in its statement that "should any party make an actual offer to acquire Mylan, the Board would carefully consider it in exercising its fiduciary duties in the best interests of the company, our stockholders and other stakeholders."
