Teva offers to purchase Mylan for $40.1 billion

Teva (TEVA) has offered to buy Mylan (MYL) for about $40.1 billion in cash and stock in a deal that would create a powerhouse of generic drug development.

If Teva manages to acquire Mylan under the offer announced Tuesday, it would help Teva secure a more dominant position as it would be taking Mylan off of a growing list of competitors. Teva would also get a competitive edge against rivals such as Sun Pharma, which itself consolidated for a more powerful position when it took a controlling stake of its rival Ranbaxy in 2014.

But Mylan already announced Friday as speculation was swirling about a possible Teva bid that it doubted that regulators would approve such a deal and said it is committed to its current strategy as a stand-alone company.

The Dutch company said anti-trust regulators probably wouldn't approve a deal between Mylan and Teva because their businesses overlap in major ways. But it conceded that it would thoroughly examine an offer if it received one.

Teva remains undeterred. President and CEO Erez Vigodman said in a statement Tuesday that the Israeli company is confident that any regulatory requirements needed to complete the deal "will be met in a timely manner."

Teva Pharmaceutical Industries Ltd. has offered to pay $82 per share, a 21 percent premium to Mylan's closing price on Monday.

Earlier this month Mylan NV offered to buy generic drug and ingredients maker Perrigo (PRGO) for about $29 billion, or $205 per share. Perrigo, which is based in Ireland, has said that it will review Mylan's offer.

Teva said Tuesday that its proposed Mylan buyout is more attractive. Teva's offer is contingent on Mylan not completing the proposed Perrigo deal.

Teva gets almost half its revenue from generic drugs. It also makes treatments for central nervous system disorders, respiratory illnesses, and cancer as well as over-the-counter medicines. Its biggest-selling product is the multiple sclerosis drug Copaxone. In March it agreed to buy Auspex Pharmaceuticals Inc., which is developing central nervous system disorder treatments, for $3.2 billion.

Mylan, with about 25,000 employees, had $929.4 million in net income and $7.72 billion in revenue in 2014. It has over 1,400 drugs, but the overwhelming bulk of its business is generic drugs with sales of $6.46 billion in 2014. The company's specialty segment sells the EpiPen Auto Injector emergency treatment for allergic reactions, which had sales of $1.19 billion in 2014.