Lonza looking elsewhere after retreating from Patheon bid?
pharmafile | October 21, 2009 | News story | Manufacturing and Production | Lonza
Lonza said it has elected not to proceed with a $460 million bid to buy Canadian contract manufacturing and development services company Patheon.
However, a move into formulations, in addition to Lonza’s traditional strengths in chemical and biological active pharmaceutical ingredients (APIs), still “fits within Lonza’s current growth strategy,” said the firm, which said recently it had amassed a CHF 1 billion warchest to help fund acquisitions In this area.
The Swiss company has been looking at buying a specialist in finished dosage form manufacturing in order to reduce its reliance on the API business, which is increasingly seeing low-cost competition from suppliers in Asia.
Its shift into biological ingredients and R&D in recent years is another element of that strategy. Earlier this month Lonza bought Indian cell biology specialist Simbiosys Biowares for an undisclosed sum.
Lonza’s white knight approach could have helped Patheon to fend off an earlier hostile takeover bid from JLL Patheon, a unit of US private equity firm JLL. JLL has been steadily amassing a stake in the CMO and is now claiming to hold $73.5 million (57%) of Patheon’s restricted voting shares. Patheon’s management has repeatedly dismissed its bid as inadequate.
In a statement released this morning, the Swiss company said the decision was taken for a number of reasons, including “value considerations, the rejection of the Lonza proposal by the majority shareholder, and the availability of … possible alternatives”.
JLL has been vocal in its opposition to Lonza’s bid, and has always maintained that it would be impossible for the transaction to go ahead without its support.
Lonza seems to have admitted defeat in the battle, and its decision to pull out of the bidding for Patheon comes just five days after the two firms agreed to extend an exclusivity period for negotiations.
The Swiss company had tabled an offer of $3.55 per restricted share for Patheon as a shortcut to boosting its presence in the formulation contract manufacturing business, topping JLL’s own $2 per share bid.
Lonza and Patheon said they have also agreed to terminate discussions regarding other strategic options which would not involve the sale of JLL’s shares.
Related Content
Lonza to acquire biologics site in Vacaville, US from Roche for $1.2bn
Lonza has announced that it has signed an agreement to acquire the Genentech large-scale biologics …
Lonza to acquire Synaffix to strengthen ADC development
Global manufacturer for the pharmaceutical, biotech and nutraceutical markets, Lonza has announced that it has …
Moderna submits BLA with FDA for COVID vaccine
Moderna has initiated the rolling submission process with the FDA for a Biologics License Application …
