Matrix open offer, delisting on cards

Mylan Laboratories Inc. has begun preparations for an open offer to mop up the near-24% public shareholding in its Indian subsidiary Matrix Laboratories Ltd, say three people familiar with the matter.

The open offer for Matrix could be a first step in delisting the local company’s scrip from the stock markets, which in turn is expected to give Mylan more flexibility to leverage the Indian drug maker’s manufacturing assets better with little regulatory obligations.

Mylan is the world’s third largest generics pharmaceuticals firm after its May buyout of the non-patented drugs business of Merck KGaA. The intent to delist the scrip of the Hyderabad-based Matrix was confirmed by three people close to the development—two executives of the company and a consultant who works closely with the drug maker.

The public shareholding—nearly 24 %—in Matrix is marginally below the 25% listing requirement that India’s stock market regulator plans to make mandatory by May 2008 (up from the current minimum public holding requirement of 10% in listed companies). If Mylan wants the Matrix scrip to remain listed, it would have to offload some of the Hyderabad firm’s stock or dilute equity capital. Promoter Prasad holds about 5% in the company.

Read more in The Livemint article.

Mylan Labs bags Merck's generics unit for $6.7bn

US based Mylan Laboratories has acquired German drug major Merck AG's generic drug business for euro 4.9 billion ($6.7 billion) in an all-cash transaction today. The acquisition will enable Mylan to make fullest use of the basic bulk drug (API) manufacturing capabilities of its Indian arm, Matrix.The acquisition has turned Mylan the third biggest global player in generics business after Israel's Teva and Swiss major Novartis's generic arm Sandoz.

Mylan and Merck Generics is to benefit from significant savings driven by Hyderabad based Matrix's low cost, high quality API (bulk drug) capacity and the benefits of manufacturing high product volumes for multiple markets around the world.

In 2007, Mylan completed its acquisition of a 71.5% stake in Matrix, the second largest API manufacturer globally, with more than 165 APIs in the marketplace or under development.

Read more in The Business Standard article.