Mylan Inc. (MYL)’s $1.6 billion acquisition of a Strides Arcolab Ltd. (STR) unit has been put on hold as Indian regulators raise concern about foreign ownership of companies that make cancer drugs, the Economic Times reported.
India’s Foreign Investment Promotion Board deferred a decision on the acquisition July 8, the newspaper said in a story today on its website. Regulators worry Canonsburg, Pennsylvania-based Mylan may steer oncology treatments made in India to the U.S. market, making them less available at home, the newspaper reported.
“We remain confident in our ability to complete the transaction in the fourth quarter of this year,” Nina Devlin, a Mylan spokeswoman, said in an e-mail today. She didn’t address a question asking if the Economic Times report was accurate.
Mylan, the second-biggest company focused on generic drugs, announced its purchase in February of Bangalore-based Strides’ Agila Specialties, which makes injectable cancer medicines. While the deal probably will still go through, it may be postponed and Mylan may need to offer other assurances, Douglas Tsao, a New York-based Barclays analyst told clients in a research report.
“The deal could be delayed a few months past its expected 4Q close with Mylan ultimately needing to grant concessions regarding supplying certain types of drugs and certain prices,” Tsao said in the note today.
Mylan rose less than 1 percent to $30.90 at the close in New York. The shares have gained 13 percent this year.
To contact the reporter on this story: Alex Nussbaum in New York at email@example.com
To contact the editor responsible for this story: Reg Gale at firstname.lastname@example.org