Allegan, Michigan based Private Brand drug manufacturer Perrigo will buy Irish biotech company Elan Corporation for $8.6 billion, in a cash and stock deal, the companies announced on Monday, in a joint statement.
Perrigo will pay $6.25 a share in cash and 0.07636 shares of Perrigo — the proposed new company combining Perrigo and Elan — valued at $10, for each Elan share. The offer price is at a premium of about 10.5% over Elan’s closing price on Friday.
The deal is expected to help Perrigo save $150 million in taxes and operating expenses, as it will allow the company to move its headquarters to Ireland – where Elan is based — which has a low corporate tax rate of 10.5%, compared to the 30% tax rate in the U.S.
“Certain of these synergies result from the elimination of redundant public company costs while optimizing back-office support and the global R&D functions. Additionally, tax savings are expected to arise from the combined company being incorporated in Ireland with organizational, operations and capitalization structures that will enable the combined company to more efficiently manage its global cash and treasury operations,” Joseph C. Papa, Perrigo Chairman and CEO, said in a news release.