The Separation and Distribution Agreement also governs the rights and obligations of Pfizer and Newco regarding the distribution by Pfizer of Newco Common Stock to Pfizer’s stockholders. At Pfizer’s election (subject to certain restrictions) to the Separation and Distribution Agreement, the Distribution may be effected by means of a pro rata distribution of Newco Common Stock to Pfizer’s stockholders or through an exchange offer of Pfizer Common Stock for Newco Common Stock, followed by a pro rata, clean-up distribution to Pfizer’s stockholders of the remaining shares of Newco Common Stock held by Pfizer that were not exchanged in the exchange offer.

Prior to, and as a condition of, the Distribution, Newco will make a cash payment to Pfizer equal to $12.0 billion (the “Cash Distribution”). On July 29, 2019, Newco and certain financial institutions executed a 364-day bridge loan facility commitment letter to which such financial institutions have committed to provide bridge financing to Newco to fund in part the amount of the Cash Distribution and to pay fees and expenses related to the transactions contemplated by the Business Combination Agreement, on the terms and conditions set forth therein.

The Separation and Distribution Agreement also sets forth other agreements between Pfizer and Newco related to the Distribution, including provisions concerning the termination and settlement of intercompany accounts, certain working capital adjustments and governmental approvals and third-party consents. The Separation and Distribution Agreement governs certain aspects of the relationship between Pfizer and Newco after the Distribution, including provisions with respect to release of claims, indemnification, insurance, access to financial and other information and access to and provision of records. The parties have mutual ongoing indemnification obligations following the Distribution with respect to certain liabilities related to the Upjohn Business and Pfizer’s business, respectively.

Consummation of the Distribution is subject to various conditions, including the satisfaction or waiver of all conditions under the Business Combination Agreement (which include the completion of the Cash Distribution and other conditions described below). The Separation and Distribution Agreement provides that Mylan is a third-party beneficiary of certain provisions of the Separation and Distribution Agreement.

The foregoing description of the Separation and Distribution Agreement and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Separation and Distribution Agreement, which is attached as Exhibit 2.2 and is incorporated herein by reference.

The Business Combination Agreement

Structure. Under the terms of the Business Combination Agreement, immediately following the Distribution, and unless the Alternative Transaction Structure (as defined below) is adopted, Newco and Mylan will combine through the following series of transactions (subject to the terms and conditions of the Business Combination Agreement):

3

If the Mylan Merger is not consummated within the period specified by Section 2:318(1) of the Dutch Code (generally, six months after the announcement that the merger proposal with respect to the Mylan Merger has been deposited or disclosed for public inspection), then, unless otherwise mutually determined by Pfizer, Newco and Mylan, the Combination shall consist of the following series of transactions (subject to the terms and conditions of the Business Combination Agreement):

Each step of the Combination is intended to be completed substantially concurrently, in the order indicated. We do not expect any Dutch withholding taxes to apply to the consideration (liquidation distribution) received by Mylan shareholders in the Combination.

Post-closing Governance. The Business Combination Agreement provides that as of the closing of the Combination the Board of Directors of Newco (the “Board”) will have 13 members, including (i) Mylan’s current Chairman (who will serve as Executive Chairman of the Board) and the current Global President of the Upjohn Business (who will serve as Chief Executive Officer), (ii) eight persons designated by Mylan, and (iii) three persons designated by Pfizer.

Closing Conditions. Consummation of the Combination is subject to various conditions, including, among others, approval of the transactions contemplated by the Business Combination Agreement by the Mylan shareholders; the effectiveness of the registration statements to be filed in connection with the Distribution and the Combination; the approval of the listing of the Newco Common Stock on the New York Stock Exchange or the NASDAQ Stock Market, subject to official notice of issuance; the receipt of a private letter ruling from the Internal Revenue Service to the effect that the Contribution, the Cash Distribution (including Pfizer’s use of such cash) and the Distribution will qualify as tax-free for Pfizer and Pfizer’s stockholders, which ruling shall not have been withdrawn or rescinded, or modified in any material respect; and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of certain foreign antitrust approvals.

4

Representations, Warranties and Covenants. Pfizer (on behalf of itself and Newco) and each of the Mylan Parties make certain customary representations, warranties and covenants in the Business Combination Agreement, including, among other things, covenants by Mylan not to take certain actions prior to the closing of the Combination without the prior approval of Pfizer. In addition, Pfizer also agreed not to take certain actions with respect to the Upjohn Business prior to the closing of the Combination without the approval of Mylan. Pfizer and Mylan have also agreed in the Business Combination Agreement to covenants to not solicit competing transactions.

Termination. The Business Combination Agreement contains specified termination rights for Pfizer and Mylan, including in the event that the Combination has not been consummated on or prior to June 30, 2020, subject to two three-month extensions if all conditions to the closing of the Combination, other than certain conditions relating to regulatory approvals, have been satisfied or waived on such date (other than the conditions that the separation of the Upjohn Business from Pfizer and the Distribution have occurred and those conditions which by their nature are to be satisfied at the closing; provided that such conditions shall then be capable of being satisfied if the closing were to take place on such date). Additionally, the Business Combination Agreement requires Mylan to pay Pfizer a termination fee of $322 million if the Business Combination Agreement is terminated under certain circumstances.

The foregoing description of the Business Combination Agreement and the transactions contemplated thereby, does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Business Combination Agreement, which is attached as Exhibit 2.1 and is incorporated herein by reference.

The above descriptions of each of the Separation and Distribution Agreement and the Business Combination Agreement have been included, to provide investors and security holders with information regarding the terms of each of the Separation and Distribution Agreement and the Business Combination Agreement. They are not intended to provide any other factual information about the Mylan Parties, Pfizer, Newco, Newco Sub and their respective subsidiaries and affiliates, or any of their respective businesses. The Business Combination Agreement contains representations and warranties that are solely for the benefit of parties thereto. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure letters that the parties have exchanged in connection with signing the Business Combination Agreement as of a specific date. The disclosure letters contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Business Combination Agreement. Therefore, investors and security holders should not treat the representations and warranties as categorical statements of fact. Moreover, these representations and warranties may apply standards of materiality in a way that is different from what may be material to investors. They were made only as of the date of the Business Combination Agreement or such other date or dates as may be specified in the Business Combination Agreement and they are subject to more recent developments. Accordingly, investors and security holders should read the representations and warranties in the Business Combination Agreement not in isolation but only in conjunction with the other information about Mylan and Pfizer and their respective subsidiaries that the respective companies include in reports and statements they file with the Securities and Exchange Commission (“SEC”).

On July 29, 2019, Pfizer issued a press release in connection with the transactions. The press release is attached as Exhibit 99.1 hereto and is incorporated by reference herein.

5

Also on July 29, 2019, Pfizer issued an investor presentation in connection with the transactions. A copy of the investor presentation is attached as Exhibit 99.2 hereto and is incorporated by reference herein.

Forward-Looking Statements

This communication contains “forward-looking statements”. These statements are made to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, statements about the proposed transaction, the expected timetable for completing the proposed transaction, the benefits and synergies of the proposed transaction, future opportunities for the combined company and products and any other statements regarding Pfizer’s, Mylan’s and Newco’s future operations, financial or operating results, capital allocation, dividend policy, debt ratio, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competitions, and other expectations and targets for future periods. Forward-looking statements may often be identified by the use of words such as “will”, “may”, “could”, “should”, “would”, “project”, “believe”, “anticipate”, “expect”, “plan”, “estimate”, “forecast”, “potential”, “intend”, “continue”, “target” and variations of these words or comparable words. Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; changes in relevant tax and other laws; the parties’ ability to consummate the proposed transaction; the conditions to the completion of the proposed transaction, including receipt of approval of Mylan’s shareholders, not being satisfied or waived on the anticipated timeframe or at all; the regulatory approvals required for the proposed transaction not being obtained on the terms expected or on the anticipated schedule or at all; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements and the providing of estimates of financial measures, in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and related standards, or on an adjusted basis (“Non-GAAP measures”); the integration of Mylan and Newco being more difficult, time consuming or costly than expected; Mylan’s and Upjohn’s failure to achieve expected or targeted future financial and operating performance and results; the possibility that the combined company may be unable to achieve expected benefits, synergies and operating efficiencies in connection with the proposed transaction within the expected time frames or at all or to successfully integrate Mylan and Newco; customer loss and business disruption being greater than expected following the proposed transaction; the retention of key employees being more difficult following the proposed transaction; Mylan and Newco’s capacity to bring new products to market, including but not limited to where it uses its business judgment and decides to manufacture, market and/or sell products directly or through third parties, notwithstanding the fact that allegations of patent infringement(s) have not been finally resolved by the courts (i.e., an “at-risk launch”); the scope, timing and outcome of any ongoing legal proceedings and the impact of such proceedings on Mylan’s and Newco’s consolidated financial condition, results of operations and/or cash flows; Mylan’s and Newco’s ability to protect their respective intellectual property and preserve their respective intellectual property rights; the effect of any changes in customer and supplier relationships and customer purchasing patterns; the ability to attract and retain key personnel; changes in third-party relationships; the impacts of competition; changes in the economic and financial conditions of the business of Mylan or Newco; and uncertainties and matters beyond the control of management and other factors described under “Risk Factors” in each of Pfizer’s and Mylan’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC. You can access Pfizer’s or

6

Mylan’s filings with the SEC through the SEC website at www.sec.gov or through Pfizer’s or Mylan’s website, and Pfizer and Mylan strongly encourage you to do so. Except as required by applicable law, Pfizer, Mylan or Newco undertake no obligation to update any statements herein for revisions or changes after the date of this communication.

Additional Information and Where to Find It

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the “Securities Act”). In connection with the proposed combination of Newco and Mylan, which will immediately follow the proposed separation of the Upjohn Business from Pfizer (the “proposed transaction”), Newco, Mylan and Mylan Newco intend to file relevant materials with the SEC, including a registration statement on Form S-4 that will include a proxy statement/prospectus relating to the proposed transaction. In addition, Newco expects to file a registration statement in connection with its separation from Pfizer. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENTS, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT MYLAN, NEWCO, MYLAN NEWCO AND THE PROPOSED TRANSACTION. A definitive proxy statement will be sent to shareholders of Mylan seeking approval of the proposed transaction. The documents relating to the proposed transaction (when they are available) can be obtained free of charge from the SEC’s website at www.sec.gov. These documents (when they are available) can also be obtained free of charge from Mylan, upon written request to Mylan, at (724) 514-1813 or [email protected] or from Pfizer on Pfizer’s internet website at https://investors.Pfizer.com/financials/sec-filings/default.aspx or by contacting Pfizer’s Investor Relations Department at (212) 733-2323.

Participants in the Solicitation

This communication is not a solicitation of a proxy from any investor or security holder. However, Pfizer, Mylan, Newco and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction under the rules of the SEC. Information about the directors and executive officers of Pfizer may be found in its Annual Report on Form 10-K filed with the SEC on February 28, 2019, its definitive proxy statement and additional proxy statement relating to its 2019 Annual Meeting filed with the SEC on March 14, 2019 and on April 2, 2019, respectively, and Current Report on Form 8-K filed with the SEC on June 27, 2019. Information about the directors and executive officers of Mylan may be found in its amended Annual Report on Form 10-K filed with the SEC on April 30, 2019, and its definitive proxy statement relating to its 2019 Annual Meeting filed with the SEC on May 24, 2019. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of these participants will also be included in the proxy statement/prospectus when it becomes available.

7

(d)    Exhibits.

8

PFIZER INC Exhibit
EX-2.1 2 d769805dex21.htm EX-2.1 EX-2.1 Exhibit 2.1 EXECUTION VERSION BUSINESS COMBINATION AGREEMENT by and among PFIZER INC.,…
To view the full exhibit click here