PITTSBURGH–The generic drugmaker Mylan is buying Abbott Laboratories’ generic-drugs business in developed markets for stock valued at about US$5.3 billion.
Mylan said Monday that the deal will diversify and expand its business outside the U.S. The combined company will be organized in the Netherlands, which will help reduce its tax expenses, while maintaining its headquarters near Pittsburgh.
The deal is expected to lower Mylan’s tax rate to approximately 20 percent to 21 percent in the first full year, and to the high teens after that.
Several other U.S. companies are using mergers to reincorporate in countries with lower tax rates. These moves are raising concerns among U.S. lawmakers since they can cost the federal government billions in tax revenue.