Drawn-out Elan saga ended as Perrigo completes its takeover
Dublin drug company Elan is to be bought for $8.6bn (£5.6bn) by US-based generic pharmaceutical group Perrigo.
The price Perrigo has agreed to pay – the equivalent of $16.50 per Elan share – represents a near 11% premium to the closing price of Elan stock in New York last Friday.
The company will now be domiciled in the Republic of Ireland, enabling it to avail of its 12.5% corporation tax rate.
Perrigo will pay $6.25 (£4) in cash and offer 0.07636 of its own shares for each Elan share. Perrigo shares were trading at $134.23 (£87) last week.
The deal – which has to be approved by shareholders – isn't expected to close until the end of the year.
The sale brings to an end a months-long saga involving Elan, which had been the target of a hostile takeover bid by New York-based Royalty Pharma after the Irish firm sold its last remaining asset – a 50% stake in multiple sclerosis drug Tysabri.
Elan continues to receive substantial royalties from Tysabri sales.
Royalty had eventually offered to pay as much as $8bn (£5.2bn) for Elan, which included contingent payments based on future Tysabri milestones. Elan put itself up for sale last month in a continuing effort to thwart a hostile bid.
That move came just before Elan shareholders rejected proposals from the firm that included a plan to invest $1bn (£0.65bn) to buy a 20% stake of royalties from drugs produced by Theravance.
Perrigo chairman and chief executive Joseph Papa described the planned acquisition of Elan as "compelling" for the Irish company's shareholders.
Perrigo will also benefit from accumulated net losses of about $2bn (£1.3bn) on Elan's books against which it will be able to significantly reduce or eliminate future tax liabilities on profits.