M&A: Johnson & Johnson (NYSE:JNJ) Buys Europe’s Largest Biotech For $30 Billion

M&A: Johnson & Johnson (NYSE:JNJ) Buys Europe’s Largest Biotech For $30 Billion


Johnson & Johnson (NYSE:JNJ) announced that it agreed to buy Europe’s biggest biotech firm, Actelion, for $30 billion. The move comes a few days after the company announced its fourth quarter results where it indicated that it was probing acquisition. The American firm will pay $280 a share in cash to Actelion shareholders and the transaction is predicted to close in the second quarter of the current year.

Johnson & Johnson indicated that it would unveil an all-cash tender offer to buy all the outstanding shares. However, if the transaction is to sail through, the American firm will have to acquire a minimum of 67 percent shares that are issued and outstanding. The company could extend the tender offer in case the requisite number of shares is not surrendered within the specified time in the tender offer.

The company revealed that the transaction would be accretive to its adjusted EPS immediately. Johnson & Johnson believes that the transaction would allow it accelerate revenue, as well as, earnings growth in the upcoming period. The company would fund the acquisition with the available cash held outside the United States.

The American firm disclosed that it plans to file a prospectus and starts the tender offer in mid-February. For its part, Actelion would initiate EGM to approve the distribution of shares of R&D NewCo through a dividend in kind to Actelion shareholders. Incidentally, the approval of the shareholders is crucial for the transaction to sail through.

Actellion is engaged in innovative products for pulmonary arterial hypertension, which is a complementary to the current portfolio of Janssen Pharmaceutical Companies of the American firm. The addition is in line with Johnson & Johnson’s move to ensure growth in complementary therapeutic areas. The company is also keen to retain the presence of Actelion in Switzerland.

Johnson & Johnson’s Chairman and CEO, Alex Gorsky, commented, “Actelion has built an attractive, growing business with world-class commercial and clinical development capabilities. 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. We expect to leverage our established global presence and commercial strength to accelerate growth and patient access to these important therapies. Further, we believe R&D NewCo will be strongly positioned to continue Actelion`s legacy of innovation and look forward to collaborating on the development of cutting-edge new therapies.”