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Johnson & Johnson to buy Actelion for $30 billion, spin off R&D unit

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U.S. healthcare giant Johnson & Johnson will buy Swiss biotech company Actelion in a $30 billion all-cash deal that includes spinning off Actelion’s research and development pipeline, the companies said on Thursday.

The acquisition gives J&J access to the Swiss group’s line-up of high-price, high-margin medicines for rare diseases, helping it diversify its drug portfolio as its biggest product, Remicade for arthritis, faces cheaper competition.

The offer to pay $280 per share, following weeks of exclusive talks, was unanimously approved by the boards of directors of both companies.

The deal represents a 23 percent premium to Actelion’s closing price on Wednesday of 227.4 Swiss francs and is more than 80 percent above the Nov. 23 closing price before initial reports emerged that Europe’s biggest biotech company had attracted takeover interest.

Actelion shares jumped 20.3 percent to 273.60 francs by 0932 GMT as investors welcomed the deal.

“The structure is very attractive,” said Eleanor Taylor Jolidon, a fund manager at Union Bancaire Privee in Geneva, a top-40 Actelion investor.

The price vindicates the strategy of cardiologist Clozel, who co-founded the company with his pediatrician wife Martine and friends in 1997, and has fended off bids over the years in the belief he could increase Actelion’s value by keeping it independent.

“The price is quite high at around 30 times price to estimated 2018 earnings. J&J is paying a lot and R&D is not even included, just a substantial minority stake,” one Zurich-based trader said.

“But it represents only 10 percent of (J&J’s) market capitalization and they are finally investing the cash they hold in Europe.”

Jefferies analysts said they did not expect any counterbids or competition concerns to derail the deal, while Berenberg analysts called it “a fantastic deal for Actelion and its shareholders” given concerns about the long-term growth prospects for its main products.

Actelion has been the subject of takeover speculation for weeks after J&J launched and then halted discussions with the Swiss company. French drugmaker Sanofi had also been interested, sources said, but was sidelined after J&J returned and began exclusive negotiations in December.

Sanofi’s failure to come away with a big deal for a second time has added to pressure on its management.

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