Johnson & Johnson agrees $30bn deal to buy Actelion

Johnson and Johnson (JandJ) has agreed to buy Actelion for $30 billion (€28.1bn), clinching one of its largest ever deals to become a leader in medicines treating a rare type of high blood pressure.

With the purchase, JandJ, already the world’s biggest maker of healthcare products, is fulfilling its goal of adding a new drug category and dealing a blow to France’s Sanofi, which had also sought to acquire Actelion.

JandJ will begin a tender offer to buy shares of Allschwil, Switzerland-based Actelion, for $280 each in cash, the companies said in a statement.

The price, which equals 280.08 Swiss francs, is 23 per cent above Wednesday’s closing level. The research and development operations will be spun off to Actelion shareholders as a new publicly-traded company, with JandJ keeping a 16 per cent stake.

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The deal caps weeks of discussions interrupted for several days after New Brunswick, New Jersey-based JandJ walked away on December 13th, only to return to the negotiating table about a week later.

Access to Actelion’s drugs Tracleer, Opsumit and Uptravi, which all treat life-threatening pulmonary arterial hypertension, will make JandJ a leader in the disease, and help it expand beyond autoimmune, heart and cancer drugs.

Empty-handed

Meanwhile, Sanofi is left empty-handed for the second time after losing out on cancer treatment maker Medivation to another US giant,

Pfizer

, in August.

Actelion was founded 20 years ago by chief executive officer Jean-Paul Clozel, his wife Martine Clozel and a team of scientists who split from Roche Holding.

The discovery of the blockbuster Tracleer propelled it over a decade ago to becoming a leader in the treatment of pulmonary arterial hypertension. Uptravi and Opsumit followed, and are set to replace Tracleer, which has lost patent protection and faces challenges from copycat drugs.

Mr Clozel, who is among Actelion’s largest shareholders, had said in the past he wanted the company to remain independent. The chief executive is a believer in Actelion’s pipeline of experimental medicines, and he and his wife have resisted takeover bids over the years.

Before walking away JandJ had made Actelion an offer that it later increased to about $260 a share, people familiar with the situation have said, valuing the Swiss biotech at about $28 billion (€26.2bn).

Pipeline drugs

Paris-based Sanofi entered with its own proposal of about $275 a share, which included a so-called contingent value right, or CVR, for Actelion stockholders that would pay out depending on the performance of certain pipeline drugs, according to people familiar with the offer. Those talks faltered amid complications over the CVR, the people said.

Lazard is lead financial adviser to JandJ, with Citibank also providing advice. Cravath, Swaine and Moore LLP, Homburger AG and SextonRiley LLP are JandJ's legal advisers.

Bank of America Merrill Lynch is Actelion's lead adviser, with Credit Suisse also providing advice. Niederer Kraft and Frey, Wachtell Lipton, Rosen and Katz, and Slaughter and May are legal advisers to Actelion.