The US over-the-counter drug maker Perrigo Company has signed a definitive agreement to acquire the Irish biotechnology firm Elan Corporation for approximately $8.6bn, as part of its plan to expand its operations globally.
Both the firms will be combined under New Perrigo, a new firm incorporated in Ireland, at the close of the transaction. New Perrigo, which is expected to be called Perrigo Company or a variant thereof, will be led by the existing leadership team of Perrigo.
Under the terms of the deal, Elan shareholders will receive $6.25 in cash and 0.07636 shares of New Perrigo for each Elan share, after the closure of the deal.
Joseph Papa, chairman and CEO of Perrigo, said: “We believe this transaction is compelling for Elan shareholders and fully takes into account the value of Elan’s assets, including a large cash balance and a double-digit royalty claim on Tysabri, a blockbuster product that generated revenues of $1.6bn last year and has been growing at a compound annual growth rate of 19 per cent.
“We believe the combination of Perrigo and Elan will create an industry-leading global healthcare company with the balance sheet liquidity and operational structure to accelerate our growth and capitalize on international market opportunities.”
Perrigo shareholders are expected to own about 71 per cent of the combined company, while Elan shareholders are expected to own about 29 per cent, after the closure of the deal.
Kelly Martin, CEO of Elan, said: “This transaction underscores the tremendous value of Elan’s platform. The new combined company should deliver value, growth and diversification to shareholders for many years to come.”
The cash and stock transaction is expected to close by the end of 2013.