Mylan foundation to block Israel's Teva hostile takeover bid

Dutch-based US pharmaceutical giant Mylan's independent foundation said today it will excercise a call option allowing it buy shares to control half the company to fend 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 USD 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 USD 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."
It added it was concerned that "taking out one of the top four players in the generics market will reduce competition and may have an adverse impact on the affordability of generic products."

The foundation believed "obtaining the required antitrust approvals without significant remedies are unlikely."
However the call option for shares 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.