Abbott to sell generics line to Mylan

ABBOTT (NYSE: ABT) is selling its branded generics pharmaceuticals business in developed markets to generic drugs maker Mylan for equity ownership of a newly formed entity that will combine Mylan's existing business and Abbott's developed markets pharmaceuticals business, and will be a publicly traded company. The deal represents a value of approximately $5.3 billion based on Mylan's closing stock price on Friday.

Under the terms of the agreement, Abbott will sell its developed markets branded generics pharmaceuticals business to Mylan for 105 million shares (approximately 21%). The newly formed entity will be a publicly traded company.

The developed markets portion of this business generated approximately $2 billion in sales in 2013, and includes operations in Europe, Japan, Canada, Australia and New Zealand and includes approximately 3,800 employees. It includes a broad portfolio of medicines, as well as manufacturing facilities in France and Japan.

Abbott said it will retain its branded generics pharmaceuticals business and products in emerging markets, which generated 2013 sales of $2.9 billion and is expected to have a sales growth rate in the upper-single to double digits.

"This transaction provides Abbott with additional strategic flexibility as we continue to actively manage and shape our portfolio, reflecting our commitment to long-term, durable growth," said Miles D. White , chairman and chief executive officer, Abbott . "Our branded generics pharmaceuticals business will focus on emerging markets, where demographic changes and increasing access to healthcare are expected to drive sustainable growth."