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28 Jan 2017

Johnson & Johnson buying Swiss biotech firm Actelion for $30bn

American healthcare major Johnson & Johnson (J&J) is acquiring Swiss biotech firm Actelion in a $30 billion all-cash deal.

This is the largest European drug takeover in 13 years. J&J will now have access to Actelion's high-price, high-margin medicine range used to cure rare diseases.

However, the deal doesn't include Actelion's R&D unit which will be spun off into a different entity.

In context

Johnson & Johnson to buy Actelion for $30bn

What is Actelion

Actelion was co-founded by cardiologist Jean-Paul Clozel, his pediatrician wife Martine and their friends in 1997. Actelion specializes in orphan (rare) diseases and has 29 operative affiliates around the world, including the US, Brazil, Canada and Japan.

Big deal!

J&J paid 23% more than Actelion's share price

The deal allows J&J to purchase all outstanding shares of Actelion for $280. J&J's offer represents a 23% percent premium to Actelion's closing price on Wednesday.

The offer also represents an 80% premium to Actelion's November 23 closing price, which is when acquisition reports emerged.

"J&J is paying a lot and R&D is not even included, just a substantial minority stake," a trader said.

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How J&J benefits from the deal

The deal will help J&J diversify its drug portfolio even as its biggest product Remicade, the arthritis drug, faces cheaper competition.

J&J tapped into its $42bn offshore cash trove to pay for Actelion's acquisition.

This will allow the American drug major to lower its US tax bills as the American government plans to overhaul the tax code by bringing back offshore untaxed funds.

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