$8.6bn deal ends Elan’s takeover battle with Royalty Pharma
US drugmaker Perrigo has agreed to buy Irish pharma company Elan in a deal worth $8.6 billion (£5.7 billion). This hands Perrigo a base in low-tax Ireland and annual savings of up to $150 million in tax and operating costs.
Perrigo’s bid represents a significant improvement on the offers made by investment firm Royalty Pharma since February, and represents an 11% premium over Elan’s Friday stock closing price. Elan has survived three hostile takeover bids from Royalty this year, the latest valuing the company at up to $8 billion. The company became a takeover target after selling back its marketing rights for multiple sclerosis drug Tysabri (natalizumab) to Biogen Idec. However, after refusing successive bids, Elan put itself up for sale in an effort to hold off Royalty.
Perrigo supplies over-the-counter and generic drugs and will now form New Perrigo. The new company will be based in Ireland, where corporation tax is 12.5% compared to 35% in the US. Elan’s accumulated losses also mean that Perrigo will gain access to up to $2 billion worth of tax deductions on its future profits, as well as expected royalty payments from Biogen’s Tysabri sales.