Court approves €6.4bn Elan buyout

The commercial court has approved the €6.48bn acquisition of the Elan pharmaceutical group by US company Perrigo. Mr Justice Peter Kelly made the relevant orders yesterday on the application of Paul Sreenan SC, for Elan Corporation plc.

The acquisition deal, announced last July, involves the US generic drug maker paying $8.6bn (€6.48bn) for Elan in a deal giving it royalty rights plus lower taxes as a result of being domiciled in Ireland.

Elan’s petition said it was estimated about $22.2m may be payable to seven company executives on termination of employment and change of control. Fourteen employees may also receive bonus payments not exceeding $3.3m arising from their role in the sale.

Directors and certain employees are beneficiaries of share incentive plans which will be triggered by the acquisition, the petition added.

Perrigo had established New Perrigo, a private limited company incorporated in Ireland, solely for the purpose of effecting the transaction.

The deal involves an indirect subsidiary of New Perrigo merging with and into Perrigo, as a result of which the separate corporate existence of that subsidiary will cease and Perrigo will continue as the surviving corporation as a wholly owned indirect subsidiary of New Perrigo.

In Elan’s petition, it was stated, Perrigo’s proposal involved acquiring all the company’s outstanding shares at $16.50 per share, involving $6.25 per share in cash and $10.25 per share in Perrigo common stock.

Following completion of the acquisition, Perrigo will begin “a comprehensive evaluation” of the enlarged group’s operations.

Elan has 73 employees — 35 in Ireland, 36 in the US and two in Switzerland and six fixed-term contractors.

Last month, 99% of Elan’s shareholders approved the proposal at a special court-directed meeting in Dublin.