Mylan's Acquisition of Matrix
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Case Code : BSTR279
Case Length : 20 Pages
Period : 2005-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : Mylan, Inc./ Matrix Laboratories Ltd.
Industry : Pharmaceutical
Countries : USA; India; Global
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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.
The Other View
Though overall, the deal was expected to be a win-win
proposition for both the parties, analysts were cautious about the long-term
sustainability of Matrix's existing supply chain arrangements with other US
generic players who would now become its direct competitors.
Further, as Matrix had already been the second largest API supplier to Mylan
since 2003, transfer pricing of drugs between Mylan and Matrix was also expected
to be an issue of concern which would affect the potential top-line synergies
expected from this deal in the near term...
Post Deal Developments
After the deal was completed, Coury and Prasad were appointed
as the Non-executive Chairman and Non-executive Vice Chairman of the board of
Matrix respectively. Mylan also established its Asian headquarters in Singapore
for Prasad and his team. It was decided that Rajiv Malik (Malik) would continue
to head Matrix, while Stijn Van Rompay, the co-founder of Docpharma, would
continue to manage Docpharma...
The acquisition of Matrix helped Mylan to expand beyond the US market
and establish a global presence with 5100 employees in 10 countries.
This deal was a landmark one, suggesting that Indian generic drug makers
with FDA approved plants, a strong product pipeline, and a low-cost and
robust manufacturing base were attractive takeover targets for global
generic makers. Some analysts also expected Mylan's acquisition of
Matrix to trigger more such M&A deals in the Indian pharmaceutical
Exhibit I: Mylan: A Timeline
Exhibit II: A Note on the Global Generic Drug Industry
Exhibit III: Selected Financial Data of Mylan Inc.
Exhibit IV: Value Added by the Respective Companies to the Merged Entity
Exhibit V: Matrix: A Timeline
Exhibit VI: Contribution of Matrix's Business Segments
Exhibit VII: Matrix Laboratories Ltd. Financial for Fiscal 2006- 07
Exhibit VIII: A Note on the Indian Pharmaceutical Industry
Exhibit IX: Shareholding Pattern of Matrix