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Mylan Wins Merck Generics Auction

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By: Tim Wright

Editor-in-Chief, Contract Pharma

Mylan Laboratories, Inc. has signed a definitive agreement to acquire Merck KGaA’s generics business (Merck Generics) for $6.7 billion in cash. The combination of the two companies will create an integrated global generics and specialty pharmaceuticals company with differentiated dosage form expertise and increased API capacity. On a pro forma basis, combined 2006 revenues were $4.2 billion, EBITDA was approximately $1 billion, and the integrated company will have approximately 10,000 employees, ranking it among the largest global generic companies.

Mylan will retain Hank Klakurka, president and chief executive officer of Merck Generics, and has entered employment agreements with Merck Generics’ senior management team.

Robert J. Coury, Mylan’s vice chairman and chief executive officer, commented, “Mylan’s acquisition of Merck Generics would substantially complete the execution on one of its long-term visions: to create a world class global quality generics leader. The fit between our two companies is truly outstanding. Mylan is already a leader in the U.S., the world’s largest market, and through Matrix Laboratories controls one of the broadest API platforms in the world. Merck Generics provides us with leading positions in many of the world’s other key regions. Together, we will form a powerful, diverse, robust and vertically integrated generics platform.

The transaction is subject to regulatory review and certain other customary closing conditions and is expected to close in the second half of 2007.

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