Mylan, a global generics and specialty pharmaceutical company, has made a proposal to acquire Perrigo, an Irish international manufacturer of over-the-counter pharmaceuticals, in a cash-and-stock transaction.

Perrigo shareholders would receive $205 in a combination of cash and Mylan stock for each Perrigo share, which represents more than a 25% premium to Perrigo’s closing price on Friday, April 3 (the last trading date prior to Mylan's proposal), more than a 29% premium to Perrigo's 60-day average share price and more than a 28% premium to Perrigo's 90-day average share price.

Robert J. Coury, executive chairman, Mylan, issued a letter on April 6 to Joseph C. Papa, president, CEO and chairman of Perrigo, proposing the acquisition.

Coury wrote, “As you and I have discussed on a number of occasions over the past few years, a combination of Mylan and Perrigo offers clear and compelling strategic and financial benefits, has sound industrial logic and would create a global leader with a unique and one-of-a-kind profile. We have complementary operations across all of our businesses, both from a product and geographic perspective. In an environment where scale and reach are becoming increasingly important, the combination of our companies would result in an unmatched global platform, substantial revenue and operating synergies and enhanced long-term growth potential, all of which would serve to create significant value for the combined company's shareholders and other stakeholders.”

The combined company would have a strong financial profile including:

• Approximately $15.3 billion in 2014 pro forma sales
• Substantial free cash flows driving rapid deleveraging and enhanced reinvestment into the business
• Synergies resulting in operating margin expansion and EPS accretion
• A rich pipeline of launches
• A stronger, larger and more diverse platform to create enhanced and more predictable earnings growth
• Greater opportunities for continued growth through strategic acquisitions.

Coury proposed Papa join as co-chairman with Coury and as a member of the Mylan board. Coury wrote, “In addition, I look forward to discussing with you the possibility of potentially including other Perrigo directors on the Mylan board.”

“The Mylan board believes that continuity of our management team is critical to the success of the combined company,” wrote Coury, “As such, I will continue to serve as Mylan's executive chairman, Heather Bresch will continue to serve as CEO and Rajiv Malik will continue to serve as president.”

The proposal is subject to the pre-condition of confirmatory due diligence, which may be waived by Mylan at its discretion. This announcement is not an announcement of a firm intention to make an offer under rule 2.5 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013, and there can be no certainty that an offer will be made, even if the due diligence pre-condition is satisfied or waived.