Johnson & Johnson is moving to boost earnings and increase its revenues by buying Swiss biopharmaceutical company Actelion Ltd. for roughly $30 billion in a deal that gives the U.S.-based health care products giant a chance to increase its presence in biotech treatments.
The all-cash tender offer will enable the New Jersey-based maker of Band-Aids and prescription drugs to increase its medicines portfolio and late-stage treatment products in a complementary fit with Actelion’s health care expertise.
J&J said it would pay $280 for each of Actelion’s outstanding shares in a deal in which Actelion’s research and development unit would be spun off into a stand-alone company based in Switzerland. The transaction will be funded with J&J cash held outside the U.S., the company said.
The company predicted that the deal, expected to be completed in this year’s second quarter if regulators approve, would immediately boost its earnings per share and revenues.
Shares of J&J were up fractionally at $113.50 in trading before U.S. financial markets opened. Shares of Actelion jumped around 20 percent to 46.20 Swiss francs in Zurich trading following the announcement.
Before completion of the acquisition, Actelion is scheduled to spin out its drug discovery operations and early-stage clinical development assets into a new Swiss biopharmaceutical firm, the companies said. Shares of the new entity would be listed on the SIX Swiss Exchange and would be distributed to Actelion’s shareholders as a stock dividend when the tender offer closes.
J&J will initially hold 16% of the new entity’s shares and have rights to an additional 16% of the spin-off’s equity through a convertible note. J&J will also get an option on a new hypertension product that’s currently undergoing phase 2 clinical development testing.
The spin-off company will be led by Actelion’s current scientific team, the companies said. Actelion CEO Jean-Paul Clozel will become the new firm’s CEO, and Actelion board chairman Jean Pierre Garnier will chair the spin-off’s board.
J&J said Actelion’s products for treating pulmonary arterial hypertension are complementary to the U.S. company’s existing portfolio through its Janssen Pharmaceutical Companies.
“We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders,” Alex Gorsky, J&J’s Chairman and CEO said in a formal statement announcing the deal. “Adding Actelion’s portfolio to our already strong Janssen Pharmaceuticals business is a unique opportunity for us to expand our portfolio with leading, differentiated in-market medicines and promising late-stage products.”
Garnier predicted the deal would benefit Actelion investors, because it would enable them to “monetize their holdings in Actelion at a highly attractive cash price of $280 per share, while at the same time retaining a significant stake in the future.”
Contributing: Associated Press
Read or Share this story: http://usat.ly/2k6EQT8