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Cybernet Data Systems Inc.

Pfizer's Upjohn Business Merger with Mylan: Overview and Key Takeaways

Strategic Insights

— 1 min read

Pfizer Inc. is set to merge its Upjohn business with Mylan, a global pharmaceutical company, creating a new entity named Viatris. The transaction, which has been approved by Mylan shareholders, is expected to close on November 16, 2020. As part of the deal, Pfizer will contribute the Upjohn business to the new company and distribute its ownership interest in Upjohn to Pfizer stockholders via a spin-off. Mylan shareholders will own 43% of the combined company, while Pfizer stockholders will own 57%.

Key Takeaways:

  • The Upjohn business, a global pharmaceutical company focused on off-patent branded and generic established medicines, will be contributed by Pfizer to the new entity, Viatris.
  • The merger is expected to close on November 16, 2020, subject to customary closing conditions.
  • The new company, Viatris, will have a market capitalization of over $65 billion, making it one of the largest global pharmaceutical companies.
  • Pfizer will distribute its ownership interest in Upjohn to its stockholders via a spin-off, giving them ownership in the new company.
  • Mylan shareholders will own approximately 43% of Viatris, while Pfizer stockholders will own around 57%.
  • The transaction is expected to be tax-free to Pfizer and its stockholders.
  • The Upjohn Debt Transactions, including a $7.45 billion and ?3.60 billion aggregate principal amount of senior unsecured notes, will be used to fund the $12 billion cash payment to Pfizer.
  • The Company has not commenced operations and has no significant operating assets or liabilities.

Statistics:

  • $11.4 billion of proceeds from the Upjohn Debt Transactions are invested in money market funds as of September 27, 2020.
  • Net currency exchange losses of $144 million were incurred related to the remeasurement of Euro-denominated senior unsecured notes issued in June 2020.
  • The Company intends to use the net proceeds from the Upjohn Debt Transactions, together with the proceeds from a $600 million term loan agreement and a revolving credit agreement, to fund in full the Cash Distribution and related transaction fees and expenses.
  • The Company's calculations of expected interest payments incorporate only current period assumptions for interest rates and foreign currency translation rates.
  • The Company has approved forward-looking statements, which involve substantial risks and uncertainties.

Sources:

  • EdGAR Online via COMTEX: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
  • [Date and Edition of the SmarTrend Alert](http://www.mysmartrend.com)

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