Subsequent to the European Commission's (EC) conditional
approval of the impending $13.6 billion (or $76 per share)
Life Technologies Corp.
Thermo Fisher Scientific, Inc.
) recently received the Chinese regulatory nod for the same. As
per several recent reports including one from Reuters, China's
Ministry of Commerce lately approved Thermo Fisher's acquisition
of Life Technologies subject to certain conditions.
These conditions include divestment of TMO's cell culture and
gene modulation business, price cuts on two of the company's
products (SSP kits and SDS-PAGE protein standards) that are sold
in China, and sale of Thermo Fisher's 51% stake in China's
Lanzhou National Hyclone Bio-engineering Co Ltd.
We note that, some of these conditions are similar to those
demanded by the EC which conditionally cleared the deal in
November. Last week, to fulfill the conditions put forward by the
EC, Thermo Fisher inked a deal to divest 3 of its business
divisions to GE Healthcare, a unit of
General Electric Co.
). Per the deal, GE Healthcare will buy Thermo Fisher's gene
modulation, cell culture and magnetic beads businesses for about
In addition, Thermo Fisher needs certain other additional
regulatory go-aheads to close the LIFE takeover. This includes a
clearance from the U.S. Federal Trade Commission (FTC). The
company is currently working on completing this transaction by
In Aug 2013, more than 98% of the shareholders of Life
Technologies (representing more than 72% of the company's
outstanding shares) had voted in favor of this merger agreement.
Prior to that, on Apr 15, Thermo Fisher had disclosed its plans
to acquire LIFE for roughly $13.6 billion plus the assumption of
the latter's net debt ($2.2 billion as of year-end 2012).
The total purchase price includes cash and debt of $9.5-$10.0
billion and as much as $4.0 billion in equity. EC's support in
this regard is considered to be a major positive and a big
milestone for the deal to finally go through.
From the financial perspective, the buyout is expected to be
immediately accretive to Thermo Fisher's adjusted earnings by 90
cents to $1.00 within the first full year of the takeover.
Further, the acquisition should create significant cost and
revenue synergies for the company, with expected adjusted
operating income synergies of $85 million in the first year.
Currently, Thermo Fisher carries a Zacks Rank #3 (Hold). A
better-ranked stock in the same sector is
Geospace Technologies Corp.
) carrying a Zacks Rank #2 (Buy).
GENL ELECTRIC (GE): Free Stock Analysis
GEOSPACE TEC CP (GEOS): Free Stock Analysis
LIFE TECHNOLOGS (LIFE): Free Stock Analysis
THERMO FISHER (TMO): Free Stock Analysis
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