Several other U.S. companies are using mergers to reincorporate in countries with lower tax rates. These moves are raising concerns among U.S. lawmakers because they can cost the federal government billions in tax revenue.
The business to be acquired by Mylan encompasses more than 100 generic and specialty drugs sold in Europe, Japan, Canada, Australia and New Zealand. Some of the products include Creon, Influvac, Brufen, Amitiza and Androgel. It also include manufacturing plants in France and Japan.
The portfolio of products accounted for about $2 billion in sales last year. The division has about 3,800 employees.
Abbott is keeping its branded generic drug business in emerging markets. That business had 2013 sales of $2.9 billion. It is also keeping its other businesses and products in developed markets.
Abbott will own about 21 percent of the combined Mylan company which will be called Mylan NV but does not intend to remain a long-term shareholder. Shares of Mylan NV will trade on the Nasdaq under Mylan's existing ticker symbol, "MYL."
The transaction is expected to about double Mylan's revenue in Europe by strengthening its presence in countries such as Italy, the U.K., Germany, France, Spain and Portugal. It also is expected to more than double Mylan's revenue in Canada and Japan, and strengthen its business in Australia and New Zealand. The deal also gives Mylan a meaningful presence in the specialty and branded generics market in Central and Eastern Europe.
The deal is expected to close in early 2015. It is expected to immediately add to Mylan's earnings, to the tune of about 25 cents per share in adjusted earnings in the first year, increasing through 2018.
Mylan Inc. is based in Canonsburg, Pa.