U.S. generic drugmaker Mylan Inc. is in advanced talks to acquire a multibillion-dollar portfolio of established products from Abbott Laboratories, people familiar with the matter said.
The proposed transaction, which is in late-stage discussions, would see Mylan acquire a big chunk of Abbott's Europe-based mature drugs for several billion dollars, said the people, who asked not to be named because the matter is not public.
The acquisition of the foreign assets, according to some of the people, could also allow the U.S. company to change its tax address to overseas, a practice known as inversion that has become popular among healthcare companies seeking to cut their tax bills and gain access to cash held offshore.
The exact value of Mylan's bid could not be learned, but people familiar with the matter previously told Reuters that Abbott was looking to sell a portfolio of mature drugs that could fetch more than $5 billion.
A deal could come as soon as next week, but the discussions are continuing and could still fall apart, the people cautioned.
Representatives for Mylan declined to comment, while Abbott did not immediately respond to requests for comment.
A potential deal with Abbott would come after Mylan's failed attempt to buy Swedish drugmaker Meda AB earlier this year. Meda in April rejected Mylan's revised $6.7 billion takeover bid, saying its biggest shareholder did not back a deal.
Mylan was looking to do an inversion deal partly because it was at a disadvantage compared with foreign rivals as well as other U.S. generic drugmakers that have redomiciled to a low-tax country.
Major competitors include Teva Pharmaceuticals Industries Ltd., which is based in Israel, and Actavis Plc, which re-domiciled to Ireland through a 2013 acquisition of Warner Chilcott. Both face lower tax rates.
Tax inversions allow U.S. companies, which face one of the highest tax rates in the world — a federal tax rate of 35 percent, and an overall rate that can be close to 40 percent, including state and local taxes — to move to a lower-tax country by buying or creating a new holding company.
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