Mylan N.V. rejected Teva Pharmaceuticals' $40.1 billion buyout offer, saying the cash-and-stock proposal undervalues the company.
The rejection comes as both Mylan and Teva look to further consolidate an increasingly competitive generic drug industry.
Mylan is in the process of trying to buy rival Perrigo, with its latest bid of about $30 billion. The offers have so far been rejected, though the Dutch company says it stands by the offers.
Mylan had previously said that Teva's bid would likely be rejected by regulators because of antitrust concerns. Its statement Monday went further, saying a Teva buyout would "expose Mylan to a problematic culture and leadership with a poor record of delivering shareholder value."
Teva had offered to pay $82 per share for the company, which marked a 21 percent premium at the time of the offer. In a letter to Teva, Mylan's board said that it would not consider a discussion to sell the company unless the starting point was more than $100 per share.
Shares of Mylan fell $2.30, or 3 percent, to $73.76 in morning trading Monday.
Teva gets almost half its revenue from generic drugs. It also makes treatments for central nervous system disorders, respiratory illnesses, and cancer as well as over-the-counter medicines. Its biggest-selling product is the multiple sclerosis drug Copaxone, which could soon face competition from generic versions. In March it agreed to buy Auspex Pharmaceuticals Inc., which is developing central nervous system disorder treatments, for $3.2 billion.
Mylan, with about 25,000 employees, had $929.4 million in net income and $7.72 billion in revenue in 2014. It has over 1,400 drugs, but the overwhelming bulk of its business is generic drugs with sales of $6.46 billion in 2014. The company's specialty segment sells the EpiPen Auto Injector emergency treatment for allergic reactions, which had sales of $1.19 billion in 2014.
Shares of Israel-based Teva Pharmaceutical Industries Ltd. fell $1.61, or 2.5 percent, to $62.80 in morning trading Monday.