By Angela Chen 

Mylan NV raised its offer to buy generic drug maker Perrigo Co. to about $33 billion and was promptly rebuffed, the latest moves in a three-way takeover tussle in the pharmaceutical industry.

Mylan's bid consists of $60 in cash and 2.2 Mylan shares for each share of Perrigo. Based on Thursday's close, the offer values Perrigo at about $222 a share. That's up from Mylan's earlier approach of $205, which was an unspecified mix of cash and stock.

In rejecting the offer, Perrigo said the bid was "lower than the previously rejected proposal" based on Mylan's unaffected share price before it became a takeover target itself.

Mylan shares have surged 28% in April, boosted in part by the company receiving its own $40 billion takeover approach from Teva Pharmaceutical Industries Ltd. Mylan has spurned Teva, but a representative for Teva said the company remains "fully committed" to its offer for Mylan.

Perrigo's shareholders also showed disappointment with Mylan's new offer, sending Perrigo's shares down 3.4% to $194.73 in late-day trading. Mylan shares edged up 3.1% to $75.98, and Teva gained 1.2% to $64.

Mylan said Friday its bid would be subject to the approval of its own shareholders, underscoring the limited room for maneuver the company may have in trying to purchase Perrigo now that it also has an offer on the table from Teva.

The three-way fight represents the latest deal-making surge in an industry grappling with slowing growth. At the heart of the frenzy is a quest for new revenue amid pricing pressure from cash-strapped governments and insurers, and increased competition.

Mylan and Perrigo generally compete in different segments of the generic-drug business. Mylan is best known for selling generic prescription drugs, though its top-selling product is the EpiPen emergency treatment for allergic reactions. Perrigo makes over-the-counter cough-and-cold remedies and infant formula for chains like Wal-Mart Stores Inc. and Walgreens, which sell the products under their own names.

Neither company is a household name, but a combination of Mylan and Perrigo would create one of the world's top sellers of low-price medicines with $15.3 billion in yearly sales.

Mylan said its nonbinding offer is fully financed, cash confirmed and not conditional on due diligence. The company estimated its investors would own about 62% of the combined company's shares, with Perrigo's holders owning the remaining 38%. It added the deal should result in at least $800 million in synergies by the end of the fourth year after the deal closes.

Under takeover rules in Ireland, where Perrigo is based, Mylan is obligated to make a public announcement once it has started the formal process of acquiring another company.

Meanwhile, a merger of Mylan and Teva--an Israeli company that says its medicines account for one out of every eight prescriptions in the U.S.--would create the world's top-selling generic-drug company with more than $30 billion in sales in 145 countries.

Teva, known for its Copaxone multiple-sclerosis drug, has said it is a natural fit with Mylan and the scale of the combined company would help it better manage costs in the low-margin generics business. It added a tie-up would bolster its ability to develop low-price knockoffs of biotech drugs, a new market that offers the potential for significant growth.

Write to Angela Chen at angela.chen@dowjones.com

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