US Federal Trade Commission conditionally approves Mylan's proposed purchase of Perrigo

Mylan said Tuesday that the US Federal Trade Commission cleared its proposed acquisition of Perrigo subject to Mylan's divestiture of seven products to resolve charges that the acquisition would be anticompetitive. Mylan executive chairman Robert Coury remarked "we are delighted to have received FTC clearance, making our offer for Perrigo now unconditional other than the one final step, which now rests solely in the hands of Perrigo shareholders."

The FTC complaint alleged that the proposed transaction would have likely harmed competition for four generic drugs, given that both Mylan and Perrigo currently market the drugs or have received FDA clearance to market the therapies. The regulator also said that the merger could have possibly affected future competition for three generic drugs by eliminating at least one likely entrant from a limited pool of future entrants in the markets.

If Mylan's takeover offer for Perrigo is successful, it will divest the rights to the assets, which include the herpes therapy acyclovir and the opioid analgesic hydromorphone, to Alvogen. The FTC concluded that Alvogen "has the necessary resources, financial and technical capabilities, and experience marketing generic pharmaceutical products to replace successfully the competition that otherwise would have been lost through the proposed acquisition."

In August, Mylan received backing to pursue its takeover of Perrigo from more than two-thirds of its shareholders at an extraordinary general meeting. The meeting was held after Mylan's board lowered the acceptance condition for pursuing the takeover from at least 80 percent of Perrigo shares to a simple majority.

Meanwhile, Perrigo CEO Joseph Papa has expressed confidence that shareholders are unlikely to give sufficient support to Mylan's hostile tender offer before the November 13 deadline.

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