Hospira Announces $2 Billion Agreement to Acquire Mayne Pharma

Hospira Announces $2 Billion Agreement to Acquire Mayne Pharma

September 21, 2006

-- Combination Doubles Hospira's International Presence and Creates the World's Leading Generic Injectable Pharmaceuticals Company
-- Transaction Expected to be Accretive to Cash EPS in 2007

    LAKE FOREST, Ill., Sept. 21 /Xinhua-PRNewswire/ --
Hospira, Inc. (NYSE: HSP), a leading global hospital
products company, and Mayne Pharma Limited (ASX: MYP), a
leading Australia-based specialty injectable
pharmaceuticals company, today announced that the companies
have entered into an agreement for Hospira to acquire Mayne.
Under the terms of the agreement, Mayne shareholders will
receive AUD$4.10 cash per outstanding ordinary share of
Mayne, or a total equity consideration of approximately
AUD$2.6 billion (US$2.0 billion), including options. The
transaction represents a 32 percent premium over Mayne's
Sept. 18, 2006, closing price. 

    "This combination will create the leading generic
injectable pharmaceuticals company in the world --
delivering unparalleled value to the global healthcare
system as well as our respective shareholders and
employees," said Christopher B. Begley, chief
executive officer, Hospira. "The Mayne acquisition
more than doubles Hospira's international presence and
significantly accelerates the expansion of our generic
injectables business." 

    Compelling Strategic Rationale

    The combination of Hospira and Mayne represents an
excellent strategic fit, with highly complementary product
portfolios and geographic footprints. The acquisition is
expected to:

    -- Establish Hospira as the worldwide leader in generic
injectable 
       pharmaceuticals. Today, Hospira holds the No. 1
generic injectables 
       market position in the United States, backed by the
industry's broadest 
       portfolio and a growing product pipeline. Mayne
Pharma's leadership 
       positions in Europe and Australia, and significant
presence in Canada, 
       strengthens Hospira's global reach with an
attractive marketed 
       portfolio and strong pipeline.

    -- Accelerate Hospira's global expansion. The
acquisition doubles 
       international sales to nearly 30 percent of
Hospira's total sales and, 
       importantly, expands the company's international
infrastructure with 
       the addition of Mayne's global sales and
distribution platform.

    -- Expand and solidify Hospira's oncology presence.
Oncolytics represent 
       roughly half of Mayne's product portfolio, which
boasts a comprehensive 
       range of agents across this important and
fast-growing therapeutic 
       category and significantly strengthens Hospira's
product offerings.

    -- Provide Hospira with potent/cytotoxic manufacturing
and research and 
       development (R&D) capabilities. Mayne's
comprehensive and 
       differentiated expertise in formulating and
manufacturing potent and 
       cytotoxic compounds supplements Hospira's
already-broad development and 
       manufacturing capabilities.

    -- Continue to help reduce the overall costs of
healthcare -- to improve 
       both the affordability of care for patients and the
financial health of 
       the global healthcare system. By increasing the
number and availability 
       of generic injectable drugs in its portfolio,
Hospira will be better 
       positioned to provide high-quality, more
cost-effective alternatives to 
       many proprietary pharmaceuticals.

    "Mayne has grown rapidly over recent years and we
believe will continue to grow under the ownership of
Hospira, which will provide access to greater resources,
particularly in the important U.S. market," said Peter
Willcox, chairman, Mayne Pharma. "Hospira has a long
heritage, much like our own company, and will encourage the
development of our business to the benefit of our customers
and employees."

    "We look forward to welcoming our Mayne colleagues
to Hospira and fully expect their talents and skill sets to
contribute to our future success," said Begley. 

    Transaction Details

    The transaction is subject to Mayne shareholder,
regulatory and court approvals, as well as customary
closing conditions. Assuming all necessary approvals are
secured, the transaction is expected to be completed by the
end of the current calendar year.

    Financials 

    The combination of the two companies is estimated to
generate a minimum of $50 million of annualized synergies
in 2008. Hospira expects to achieve annual savings through
infrastructure optimization as well as improved supply
chain, administrative and other operational efficiencies.
After giving effect to estimated synergies, the transaction
is expected to be accretive to earnings per share in 2007,
excluding the impact of transaction-related expenses, such
as purchase accounting charges and integration costs, and
the amortization of intangible assets. The impact on GAAP
earnings per share, before the effect of
transaction-related expenses, is estimated to be neutral in
2008. Purchase accounting charges and the amortization of
intangible assets will be finalized after the transaction's
close. To finance the acquisition, Hospira will use
available cash and incur approximately $1.9 billion of debt
under committed financing facilities provided by Morgan
Stanley. Using Hospira and Mayne's strong combined cash
flow, the company intends to pay down the debt as quickly
as feasible.

    Advisors

    Morgan Stanley is acting as financial advisor and Baker
& McKenzie is acting as legal advisor to Hospira.
Merrill Lynch is acting as financial advisor and Clayton
Utz is acting as legal advisor to Mayne Pharma. 

    Webcast

    A conference call for investors and media will be held
at 7:30 a.m. Central Time on Thursday, Sept. 21, 2006. A
live webcast of the conference call will be available at
http://www.hospirainvestor.com . Listeners should log on
approximately 10 minutes in advance to ensure proper
computer setup for receiving the webcast. A replay will be
available on the Hospira Web site for 30 days following the
call.

    About Hospira

    Hospira, Inc. is a global specialty pharmaceutical and
medication delivery company dedicated to Advancing
Wellness(TM) by developing, manufacturing and marketing
products that help improve the productivity, safety and
efficacy of patient care. With 70 years of service to the
hospital industry, Hospira's portfolio includes one of the
industry's broadest lines of generic acute-care
injectables, which help address the high cost of
proprietary pharmaceuticals; integrated solutions for
medication management and infusion therapy; and the leading
U.S. injectable contract manufacturing business.
Headquartered north of Chicago in Lake Forest, Ill.,
Hospira has approximately 13,000 employees and 14
manufacturing facilities worldwide. Hospira's news releases
and other information can be found at http://www.hospira.com
.

    About Mayne Pharma

    Mayne Pharma Limited is a specialty pharmaceutical
company focused on developing, manufacturing and selling a
comprehensive range of products to oncology customers in
more than 65 countries around the world. The company seeks
to augment its growth by accessing additional marketed or
development-stage products either through acquisition or
partnership. Mayne Pharma generated sales of more than
AUD$800 million in its financial year ended 30 June 2006
and is listed on the Australian Stock Exchange under the
symbol 'MYP'. For more information about Mayne Pharma,
please visit http://www.maynepharma.com . 

    Private Securities Litigation Reform Act of 1995 -- A
Caution Concerning Forward-Looking Statements

    This press release contains forward-looking statements
within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements regarding the
proposed business combination of Hospira and Mayne Pharma,
the anticipated consequences and benefits of such
transaction, projected cost savings and the projected
impact on Hospira's earnings. Hospira cautions that these
forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ
materially from those indicated in the forward-looking
statements. Risks and uncertainties relating to the
proposed transaction include: the risk that regulatory
approvals will not be obtained on a timely basis or at all;
the risk that the transaction will not be consummated; risks
relating to the integration of Mayne Pharma's business into
Hospira, including incurring higher than expected costs or
experiencing delays or other difficulties associated with
the integration; the risk that the anticipated benefits and
synergies from the transaction will not be realized; and
risks associated with Hospira's incurrence of substantial
indebtedness. Economic, competitive, governmental,
technological and other factors that may affect Hospira's
operations and may cause actual results to be materially
different from expectations include the risks,
uncertainties and factors discussed under the headings
"Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of
Operations" in Hospira's Annual Report on Form 10-K
for the year ended Dec. 31, 2005, and subsequent Quarterly
Reports on Form 10-Q, filed with the Securities and
Exchange Commission, which are incorporated by reference.
Hospira undertakes no obligation to release publicly any
revisions to forward-looking statements as the result of
subsequent events or developments.

    For more information, please contact:

    U.S. Media    
     Stacey Eisen
     Tel:    [phone]

    Australian Media
     Tony Rasman
     Fleishman Hillard Australia
     Tel:    [phone]
     
    Financial Community, Lynn McHugh    
     Tel:    [phone]

    Media, Sue Cato, Cato Counsel
     Tel:    [phone]

    Media, Matt Horan, Cato Counsel
     Tel:    [phone]

    Financial Community, Andrew Rowe
     Tel:    [phone]
     Mobile: [phone]

SOURCE  Hospira, Inc.