Mylan's Acquisition of Matrix

            
 
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : BSTR279 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

Mergers | Acquisitions | Strategic Alliances | Growth Strategy
Case Length : 20 Pages
Period : 2005-2007
Pub Date : 2008
Teaching Note : Not Available
Organization : Mylan, Inc., Matrix Laboratories Ltd.
Industry : Pharma and Biotech
Countries : USA; India; Global

Abstract:

In January 2007, Mylan Inc. (Mylan), one of the largest US generic drug makers, acquired a 71.5 percent stake in Matrix Laboratories Ltd. (Matrix), India, a leading Active Pharmaceutical Ingredients (API) supplier globally, for a cash and stock deal of US$736 million. The Mylan-Matrix deal was the largest acquisition in the Indian pharmaceutical industry and was viewed by analysts as a step toward backward integration for Mylan. The deal not only gave Mylan access to a low cost manufacturing platform, but also immediate presence in the emerging markets of Asia and Africa as well as the lucrative generic drugs markets in Europe.

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Matrix, on the other hand, gained the much-needed scale that generic companies required to survive in a very competitive market place. It was very important for Indian pharmaceutical companies considering that these companies did not have research molecules of their own.

Analysts felt that with the global generic drugs industry undergoing a consolidation phase, large pharmaceutical companies were eyeing Indian pharmaceutical companies as potential targets of M&A deals. This was because, with considerable pricing pressures in the US, these companies were on the lookout for low-cost suppliers.

In addition to the low-cost manufacturing platform, the attractiveness of the Indian companies stemmed from the fact that they had large and varied product portfolios and world-class manufacturing facilities. Indian pharmaceutical companies also had a number of Drug Master Files (DMFs) and Abbreviated New Drug Application (ANDA) filings in the US, the world's largest market for pharmaceuticals. Moreover, some of these companies had developed a significant presence in the European and African markets through the inorganic route.

Issues:

Understand the issues and challenges in the global generic dugs industry, with special reference to the pharmaceutical market in the US and India.

Understand the reasons behind an the US-based Mylan, Inc.'s foray into the global market, in the backdrop of the challenges it faced in the US market.

Understand the issues and challenges faced by an Indian pharmaceutical company in growing its business in the international market.

Understand and appreciate the role of mergers and acquisitions as a growth strategy.

Contents:

  Page No.
Benefits Beyond Global Expansion 1
Background Note 3
The Deal 6
Rationale behind the Acquisition 7
The Other View 9
Post Deal Developments 10
Outlook 11
Exhibits 12

Keywords:

Strategy, Competition, Merger & acquisition, Global expansion, Growth, Product portfolio, Supply chain, Backward integration, Generic drugs industry, Contract manufacturing, Pharmaceutical, Management, Restructuring, Mylan, Matrix, Teva, Sandoz, Barr, Actavis, E Merck, India, Low cost

Benefits Beyond Global Expansion - Next Page>>


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