What is the main purpose of this transaction?

The main purpose is to combine Pfizer's Upjohn business with Mylan N.V. to create a new, independent company focused on generics and established medicines. This allows Pfizer to concentrate on its innovative drug pipeline.

How will Pfizer shareholders be affected by this deal?

Pfizer shareholders are expected to receive shares in the new combined company (Newco) that will own both the Upjohn business and Mylan. They are projected to own approximately 57% of this new entity, while Mylan shareholders will own the remaining 43%.

What is the Upjohn business?

The Upjohn business is Pfizer's global, primarily off-patent branded and generic established medicines division. It includes well-known products that are no longer protected by patents.

What are the key conditions for this transaction to be completed?

Key conditions include the approval of Mylan shareholders, receipt of necessary regulatory approvals (such as antitrust clearances), and the successful completion of the separation and distribution of the Upjohn business from Pfizer. A private letter ruling from the IRS confirming the tax-free nature of the transaction for Pfizer and its stockholders is also a condition.

PFE 8-K: Material Agreements & Regulation FD

Summary

Pfizer Inc. announced on July 29, 2019, a significant strategic move involving the combination of its Upjohn business (focused on off-patent branded and generic established medicines) with Mylan N.V. This transaction will be structured as a spin-off of Upjohn into a new entity, Newco, followed by a merger of Newco with Mylan. Upon completion, Pfizer shareholders are expected to hold approximately 57% of the new combined company, with former Mylan shareholders owning the remaining 43%. The Upjohn business will contribute approximately $12 billion in cash to Pfizer prior to the separation, funded in part by bridge financing secured by Newco. This transaction represents a major strategic realignment for Pfizer, allowing it to focus on its innovative core businesses. The combined entity, formed by Upjohn and Mylan, aims to create a stronger, more competitive player in the generics and established medicines market. Key agreements, including a Business Combination Agreement and a Separation and Distribution Agreement, have been executed, outlining the terms and conditions for both the separation of Upjohn from Pfizer and its subsequent combination with Mylan. The transaction is subject to customary closing conditions, including Mylan shareholder approval and regulatory approvals.

Key Highlights

1Pfizer is combining its Upjohn business with Mylan N.V. in a strategic transaction expected to create a new, leading generics and established medicines company.
2The transaction involves spinning off Pfizer's Upjohn business into a new entity (Newco), which will then merge with Mylan.
3Pfizer shareholders are expected to own approximately 57% of the new combined company, with Mylan shareholders holding about 43%.
4Newco will pay Pfizer $12 billion in cash prior to the separation, partially funded by bridge financing.
5The deal has been approved by the Boards of Directors of both Pfizer and Mylan.
6The transaction is subject to regulatory approvals, Mylan shareholder approval, and other customary closing conditions.
7Pfizer will retain its innovative medicines business, allowing for a strategic focus post-transaction.

PFIZER INC 8-K Report, Material Agreement (Jul 29, 2019)

Summary

Key Highlights

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