Abbott Sells Branded Generics To Mylan In $5.3 Billion Dollar Deal

Abbott Laboratories says it will sell its developed markets branded generics pharmaceuticals business to Mylan. The exchange will combine Mylan's existing business and Abbott's developed markets pharmaceuticals business into an estimated $5.3 billion company.

As part of the agreement, Abbott will:

• Keep its branded generics pharmaceuticals business and products in emerging markets, focusing on locations that are growing their healthcare systems and working to increase patient access to medical care
• Receive 105 million shares of the newly formed entity 
• Retain its branded generics business, which generated 2013 sales of $2.9 billion and is expected to have a sales growth rate in the upper-single to double digits.

Mylan will take over more than 100 specialty and branded generic pharmaceutical products in cardio/metabolic, gastrointestinal, anti-infective/respiratory, CNS/pain, and women's and men's health. The deal also includes several patent protected, novel and/or hard-to-manufacture products with continued growth potential" the company said.

"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," Miles D. White, chairman and CEO, Abbott, said. "Our branded generics pharmaceuticals business will focus on emerging markets, where demographic changes and increasing access to healthcare are expected to drive sustainable growth."

The new company will be based in the Netherlands to take advantage of lower tax rates, the Wall Street Journal reported.

In the past year, it's become a trend for healthcare companies to seek more competitive tax structures. Several U.S. companies have attempted to purchase or have acquired European businesses through what they call inversion deals that allow them to lower their corporate tax burden.

Just last month Minneapolis-based medical device maker Medtronic paid $42.9 billion for Irish company Covidian.

U.S. drugmaker AbbVie, known for the arthritis drug Humira, is in talks over a $53 billion plan to buy out Dublin-based Shire, which makes Adderall. UK tax rates are set to drop to 20 percent next year compared to a 35 percent tax rate in the U.S., the New York Post reported.