Abbott to sell portion of generic drug business for $5.3 billion

Abbott Laboratories has agreed to sell its branded generic drug business in developed countries to Mylan Inc. in a deal valued at $5.3 billion.

The deal, announced Monday, allows the Chicago-area firm to shed its branded generic drug operations in Europe, Japan, Canada, Australia and New Zealand to focus on Latin America and other emerging markets.

As part of the transaction, Abbott will have a 21% stake in a newly formed public company that combines Mylan’s existing business and the developed generic operations Abbott is selling.

That new firm, Mylan N.V, will be incorporated in the Netherlands, allowing Mylan to reduce its corporate taxes. Mylan said it will keep its headquarters just outside Pittsburgh, as well as its current leadership team.

Going forward, Abbott will focus its branded generics business on emerging markets, where “demographic changes and increasing access to healthcare are expected to drive sustainable growth,” said Chief Executive Miles D. White.

In May, Abbott said it agreed to purchase Latin American firm CFR Pharmaceuticals.

The deal is expected to close in the first quarter of 2015. Shares of both companies were up in late-morning trading.

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