Hospira buys Mayne Pharma for $2.0 B

Australian drugmaker Mayne Pharma has agreed to a A$2.6 billion ($2.0 billion) takeover by Hospira, a USA-based maker of hospital products spun out from Abbott Laboratories. Shareholders will receive A$4.10 per outstanding ordinary share of Mayne, which represents a 32% premium over its September 18 closing price.

The deal will create the world's biggest producer of generic injectable pharmaceuticals and more than doubles Hospira's international presence. Shares in the US firm rose $1.65 to $39.20 in afternoon trading on September 21, the day the news was announced, with investors hoping that Mayne can boost its ailing profits.

Hospira noted that Mayne will expand and solidify its oncology presence as anticancer drugs represent roughly half of the latter's product portfolio, as well as providing it with cytotoxic manufacturing and R&D capabilities. Hospira expects the merger to generate at least $50.0 million of annualized synergies in 2008, and says it will be accretive to earnings by 2007, excluding merger-related costs.