Mylan foundation to block hostile takeover bid from Israel's Teva

Teva Pharmaceutical Industries' Jerusalem plant

Dutch-based US pharmaceutical giant Mylan's independent foundation said Thursday it will exercise a call option allowing it buy shares to control half the company, in fending off a multi-billion hostile takeover bid by Israeli rival Teva. The foundation "formed its independent judgement that Mylan's best interests are at risk as a consequence of the uncertainty and threats associated by a possible takeover by Teva," the Mylan foundation said in a statement.
Mylan, a US-listed company that moved to the Netherlands a year ago for fiscal reasons, had dismissed Teva's $40.1 billion (36.4 billion euros) bid in April. The foundation "has established that Mylan and Teva, although both large and successful players in the global market for generic products, have a highly dissimilar business approach, culture, financial model and related management compensation schemes," it said.
Also, Mylan focused on India, the United States and developing countries, while Teva focused mainly on Israel and Eastern Europe, the foundation added. It said that Teva's projected $2 billion "of synergies" from the deal "will require major cuts not just in general and administrative expenses and sales, but also in research and development and manufacturing."
The foundation "believes it is a reasonable assumption that the necessary cuts will impact Mylan the most." The call option for shares, however, was temporary and will remain in place no longer than necessary "to achieve the objectives in line with its purpose," it added.
Independent foundations are frequently formed in the Netherlands to block hostile takeover bids. For instance, an independent foundation linked to Dutch telecoms company KPN in 2013 successfully fended off a mega-takeover bid by America Movil of Mexico.
Teva's bid to acquire Mylan, also a big generics manufacturer, comes as Mylan has launched an unsolicited takeover of its own for Perrigo, the maker of popular over-the-counter products such as Sudafed, Claritin and NyQuil. Perrigo rejected Mylan's initial offer and a second higher offer.