Mylan, King call off merger plans

/ Source: The Associated Press

Mylan Laboratories Inc. and King Pharmaceuticals Inc. have agreed to call off their planned merger because they cannot agree on terms for Mylan to acquire King, the companies said Sunday.

Mylan, a Pittsburgh-based generic drug maker, had made a $4 billion all-stock offer in July to buy Bristol, Tenn.-based King, a maker of brand-name drugs. Mylan had a chance to negotiate new terms when King announced recently that it would have to restate earnings for 2002, 2003 and the first six months of 2004.

"Following discussions, the companies were not able to agree upon terms for a revised transaction," the announcement Sunday night said.

Wall Street has been sour on the King deal from the start, with Mylan's shares falling 20 percent on the news of the planned acquisition.

Billionaire investor Carl Icahn, Mylan's second-largest shareholder, had been a prominent opponent of the merger and sued to block recently amended corporate bylaws at Mylan that aimed to expedite it.

Mylan officials at the time said Icahn did not have a solid plan for the company.

Mylan announced Friday a delay in any approval to market the company's blood pressure medication Nebivolol, a key part of the proposed King acquisition. Officials said King's 1,200-person sales force would be used to market the hypertension drug.

The FDA had asked for a new presentation of Mylan's clinical data on more than 2,000 patients with high blood pressure, which could result in a delay of up to 90 days. Mylan officials said they hoped the delay would not be that long and didn't consider it a setback.

Mylan shares fell 19 cents to close at $16.94 in Friday trading on the New York Stock Exchange. Shares had been trading at a 52-week range of $14.24 to $24.95. King shares fell 12 cents Friday to close at $10.25, near the low end of its 52-week range of $10.01 to $20.22.

Later Sunday night, Mylan announced a March 10 conference call to provide investors with financial guidance and an update on Nebivolol.

Representatives of Mylan, King and the investment company Icahn Associates Corp. did not immediately return phone messages Sunday night.