Meda Had Preliminary Mylan Contact Amid Reports of Takeover

Apr 04, 2014 8:27 am ET

(Updates with Mylan comment in fourth paragraph.)

April 4 (Bloomberg) -- Meda AB, the Swedish maker of the Dymista allergy medicine, has had “preliminary contact” with Mylan Inc., Chairman Bert-Ake Eriksson told a local news agency today, amid reports the U.S. company may make a takeover offer.

Meda will release a statement today, Sweden’s Direkt news agency reported, citing Eriksson. The Financial Times and the Wall Street Journal reported yesterday that Mylan was considering making an offer and had hired advisers. Paula Treutiger, a Meda spokeswoman, confirmed that a statement will be issued this afternoon. The company has a market value of 29.3 billion kronor ($4.5 billion).

Meda may be an attractive target for Canonsburg, Pennsylvania-based Mylan to help the biggest U.S. generic-drug maker expand in respiratory and branded dermatology generics, strengthen its position in emerging markets and Europe, and help lower its tax rate, Thomas Maul, an analyst in Frankfurt at DZ Bank AG, said in a note to investors today.

Mylan doesn’t comment on rumors and speculation, Nina Devlin, a spokeswoman for the company, said in an e-mail.

Repeated speculation about a takeover has buoyed shares of Solna, Sweden-based Meda in recent years. Sun Pharmaceutical Industries Ltd. considered a bid for Meda last year, two people with knowledge of the matter said at the time. Meda said it wasn’t in talks. In 2011, Valeant Pharmaceuticals International Inc. approached Meda about a takeover, two people with knowledge of the matter said at the time. Meda denied it had been approached.

Trading Halted

Mylan shares rose 12 percent in early U.S. trading as of 8:23 a.m. New York time. Trading in Meda shares was halted by Nasdaq OMX Stockholm. The stock has risen 19 percent this year, touching a seven-year high on April 1.

Mylan Chief Executive Officer Heather Bresch has said the company is willing to look at larger deals, in both generic drugs and branded medicines. “We’re not limiting ourselves,” Bresch said in an interview in February. The company has also been looking at assets to buy that would help expand its global sales power, with commercial operations in new countries.

“I think we’re poised for a transaction this year, and our balance sheet reflects that it could be sizable,” she said in the interview.

Mylan’s top competitors, Actavis Plc and Teva Pharmaceutical Industries Ltd. have grown through purchases, expanding their product lines to include specialty and branded drugs. Actavis, based in Dublin with operations in New Jersey, on Feb. 18 agreed to buy brand-drug maker Forest Laboratories Inc. for $25 billion.

Sweden’s billionaire Olsson family, which owns shipping, offshore-drilling, finance and property companies, holds a 23 percent stake in Meda’s Class A shares through Stena Sessan Rederi AB. Eriksson is Stena Sessan’s CEO.

--With assistance from Phil Serafino in Paris.

--With assistance from Niklas Magnusson in Stockholm, Phil Serafino in Paris and Allison Connolly in London.