By Bill Berkrot
(Reuters) - Generic drugmaker Mylan NV (O:MYL) said on Wednesday it has offered to buy Perrigo Co Plc (N:PRGO) for about $29 billion (19.5 billion pounds) in a deal that would make Mylan a major player in over-the-counter consumer products and extend its geographic reach.
Mylan said it proposed to acquire the Ireland-based company for $205 per share, representing more than a 25 percent premium over Perrigo's April 3 closing price, the last trading day prior to the Mylan proposal.
Mylan Executive Chairman Robert Coury said the two companies have had several discussions about a proposed merger. The two companies had combined sales of about $15.3 billion in 2014.
Perrigo, with a large and attractive portfolio of OTC consumer products, infant formulas and a line of generic topical pharmaceutical medicines, has long been seen as a takeover target.
"What will be interesting to see is if we end up in a bidding war," said Morningstar analyst Michael Waterhouse. He suggested Teva Pharmaceutical (ARCA:TEVA) Industries (TA:TEVA), the world's largest maker of generic drugs, and serial acquirer Valeant Pharmaceuticals International (TO:VRX) as potential rival bidders for Perrigo.
Mylan has been at the center of deal speculation as one of its main rivals, Actavis Plc (N:ACT), has swallowed up companies to expand beyond generic medicines, including a deal to buy Botox maker Allergan.
In March, Mylan Chief Executive Heather Bresch raised the prospect of another "material transaction" by the end of 2015.
"Assuming Mylan can get to the finish line with this, they'd be a heck of a lot bigger in Europe," said CRT Capital Group analyst Timothy Chiang, who noted Perrigo's recent purchase of Belgium-base OTC drugmaker Omega Pharma for about $4.5 billion.
Both Mylan and Perrigo had previously undertaken so-called inversion deals to take advantage of far lower corporate tax rates outside the United States.
Mylan recently completed a $5.3 billion acquisition of Abbott Laboratories ' (N:ABT) overseas generic drugs business in a deal that allowed Mylan to move its corporate headquarters to the Netherlands. In 2013, Perrigo bought Irish drugmaker Elan for $6.7 billion and rebased from Michigan to Ireland.
The nearly $29 billion cash and stock offer is based on Perrigo's $140.8 million outstanding shares as of Jan. 30.
Perrigo shares on the New York Stock Exchange initially jumped well above the Mylan offer price to as high as $215.72, but slipped back to $197.95. Mylan shares jumped more than 15 percent to $68.72 on Nasdaq.