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news.Mylan Laboratories and King Pharmaceuticals have confirmed that they have mutually agreed to terminate the merger agreement under which Mylan was to acquire King.
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According to a statement from Mylan Laboratories, this decision comes as, following discussions, the two companies were “not able to agree upon terms for a revised transaction”.
Mylan and King announced the $4 billion merger agreement in July 2004 but, in January 2005, the two companies announced that Mylan was retreating from the merger after King had restated its financial results, which Mylan argued violated the terms of the proposed agreement. However, at this time, Mylan’s vice president and CEO, Robert Coury, did say that renegotiations were possible.
At the time of striking the deal, the move was hailed as being integral to helping Mylan expand into the patent-protected drugs market, particularly due to King’s flagship hypertension treatment product, Altace.
The confirmation of termination has, however, had more of an immediate effect on King, with its shares sinking by almost 7%. In contrast, Mylan’s shares have risen by close to 3% following the announcement.