For $30 Billion, Johnson & Johnson is Acquiring Swiss Biotech Actelion

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On Thursday, healthcare giant Johnson & Johnson JNJ announced it will acquire Swiss biotechnology company Actelion for $30 billion in order to boost its roster of rare disease treatments.

The deal will give Johnson & Johnson Actelion's coveted line-up of medicines, like treatments for pulmonary arterial hypertension, or high blood pressure in the lungs, helping it broaden its drug portfolio. Recently, its biggest product, Remicade for arthritis, has faced increased competition from cheaper alternatives.

The acquisition will be an all-cash deal, or $280 per share, and represent a 23% premium to Actelion's closing price in Wednesday of 227.4 Swiss francs. It was unanimously approved by the board of directors of both companies, and is expected to close by the end of the second quarter.

"We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders," Alex Gorsky, the chairman and chief executive of Johnson & Johnson, said in a news release .

Another part of the deal sees Actelion spinning off its drug discovery business and early-stage clinical development operations into a new Swiss biopharmaceutical company, which would then be listed on Switzerland's stock exchange, SIX.

Johnson & Johnson will initially own 16% of this new research and development company, with the option and right to acquire an additional 16%. Actelion shareholders will also receive stock in the new company. The Swiss biotech's chief executive Jean-Paul Clozel would serve as the spin-off's chief executive, while Jean-Pierre, Actelion's chairman, would be its chairman.

New Brunswick, N.J.-based Johnson & Johnson had actually ended negotiations with Actelion back in December after the two companies couldn't reach an agreement, though they picked up exclusive deal talks again just days later.

Lazard, Citigroup, and law firms Cravath, Swaine & Moore; Homburger; and Sexton Riley are advising Johnson & Johnson, while Bank of America Merrill Lynch, Credit Suisse, and law firms Niederer Kraft & Frey; Wachtell, Lipton, Rosen & Katz; and Slaughter and May are advising Actelion.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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