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Abbott LaboratoriesAnnouncement

06/09/2014 16:29

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Abbott Laboratories
14 July 2014 
 
Abbott to Sell its Developed Markets Branded Generics Pharmaceuticals Business
to Mylan 
 
Abbott will retain its branded generics pharmaceuticals business in emerging
markets 
 
Transaction expected to positively impact Abbott's sales and ongoing
earnings-per-share growth rates 
 
ABBOTT PARK, Ill., July 14, 2014 /PRNewswire/ -- Abbott (NYSE: 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 and Abbott'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 and Abbott'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 in France and
Japan. Abbott will retain its product portfolio and manufacturing facilities
in other geographies as well as its manufacturing facilities in the
Netherlands, Germany and Canada. 
 
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 with Abbott'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 this amount. 
 
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 to Abbott'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
quarter 2014. 
 
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 through Abbott's Investor Relations web site at
www.abbott.com/investors.html. 
 
About Abbott 
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, and connect with us 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") on February 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") between Abbott 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 of Abbott.
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 affect Abbott 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 ABOUT ABBOTT'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,
www.sec.gov. In addition, copies of the registration statement and proxy
statement, when they become available, may be obtained free of charge by
accessing Mylan's website at www.mylan.com/investorsor by writing Mylan at
1000 Mylan Boulevard, Canonsburg, Pennsylvania 15317, Attention: Investor
Relations. Investors may also read and copy any reports, statements and other
information filed by Abbott 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 on March 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. 
 
Non-Solicitation
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
jurisdiction. 
 
CONTACT: Media: Scott Stoffel, (847) 936-9502 or Melissa Brotz, (847) 935-3456
and Financial: Brian Yoor, (847) 937-6343 or Scott Leinenweber, (847)
935-1898 
 
This information is provided by RNS
The company news service from the London Stock Exchange