Perrigo stockholders have until mid-November to decide if they want to sell their shares to Mylan as part of a hostile takeover.
David Flanagan, a Management Professor in Western Michigan University’s Haworth College of Business, researches mergers and acquisitions. He spoke with WMUK’s Gordon Evans about Mylan’s efforts to buy Perrigo, Perrigo’s refusal to sell so far, and the war of words between the two companies.
"It's gone from hostile to antagonistic"
Both companies have criticized the other and filed lawsuits against each other. Flanagan says “it’s gone from hostile to antagonistic.” He says even when a hostile takeover begins, it can be part of a negotiating tactic. But Flanagan says in this case, all negotiation appears to be over.
Flanagan says any merger is hard to pull off. He says this one could end up being more difficult with the “bad blood” between the two companies. Flanagan says if there is going to a successful merger the two companies will have to work together. From the outside, he says it looks like this has become personal.
Perrigo is now domiciled in Ireland for tax purposes, but still has most of its corporate offices in Allegan. Mylan has is domiciled in the Netherlands. Flanagan says anti-trust regulators will take a long look at anything where the two companies are currently competing. Flanagan says regulators in Ireland and the Netherlands will also have oversight. That could add further complications to any acquisition.
Flanagan says his worry is that the two companies are so busy worrying about the merger that “no one is minding the store.” Flanagan says the companies should be focused on the best way to make quality products, hold down costs and increase profits.