German healthcare company Fresenius SE & Co. KGaA (FRE.XE) late Monday announced two acquisitions worth combined more than $5 billion to strengthen the generic drug business of its Fresenius Kabi clinical nutrition and transfusion operations in the U.S. and Europe.
Fresenius said it agreed to buy U.S. generic drugs manufacturer Akorn, Inc.. of Lake Forest, Ill., for around $4.3 billion, or $34 a share, plus around $450 million in debt. Akorn's wide-ranging product portfolio includes injectables, oral liquids, nasal sprays and respiratory drugs almost exclusively sold in the U.S. It is thus highly complementary to Fresenius Kabi's own business, said Fresenius CEO Stephan Sturm.
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Separately, Fresenius Kabi is buying the biosimilars business of German peer Merck KGaA (MRK.XE) for up to EUR670 million ($728 million). The business, located in Switzerland, develops biosimilar drugs for treating oncology and inflammatory disorders. Biosimilars are drugs resembling already approved biologic drugs and can be produced at lower costs. The biosimilars market is fast-growing segment in the global pharmaceutical market, and some patents expire over the next years, Fresenius said.
Fresenius expects the biosimilars acquisition to close in the second half of 2017 and the Akorn deal to close by early next year, due to Akorn shareholder and regulatory approvals still needed. Both transactions will boost group net profit and earnings per share from 2021 onward.
Fresenius will finance the biosimilars transaction mainly from cash flow and the Akorn deal by issuing debt.
Fresenius said the group's net debt to Ebitda ratio will temporarily increase after closing of both transactions but confirmed its 2020 net profit target in a EUR2.4 billion to EUR2.7 billion range.
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(END) Dow Jones Newswires
April 25, 2017 03:03 ET (07:03 GMT)