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The Top 7 Big Pharma Buyouts of 2010

M&A action continues to be hot this year


After the stock market’s gut-wrenching dive in late 2008 and the beginning of 2009, some of the first signs of life we saw were in the pharmaceutical sector in the form of acquisitions, mergers and buyouts. First came the massive M and A between Pfizer and Wyeth, then Roche-Genentech and Merck-Schering Ploug – all in the first few months of last year.

While things have cooled off a bit in big pharma, there is still some major acquisition action going on in 2010. Here’s a scorecard of the biggest merger and acquisition deals so far this year:

2010 Pharma Buyout # 7 –Abraxis

Price Tag – $2.9 billion

Buyer – Celgene

Celgene Corporation (NYSE: CELG) announced its merger with Abraxis BioScience Inc. (NASDAQ: ABII) on June 30.  The acquisition of Abraxis added Abraxane Injectable Suspension to Celgene’s already impressive portfolio of cancer products. The move was made in an attempt to make Celgene the world leader in oncology products – an increasingly important segment of the healthcare and pharmaceutical business.

A price of $2.9 billion was settled on by the two pharmaceutical companies.  The acquisition greatly strengthened Celgene’s global position, and allows the company to more effectively treat those suffering from breast cancer, as well as solid tumor malignancies which are often seen in lung and pancreatic cancer.

2010 Pharma Buyout # 6 –Valeant

Price Tag – $3.3 billion

Buyer – Biovail Corp.

In June, Canadian company Biovail Corp. (TSE: BVF) acquired drug producer Valeant Pharmaceuticals International (NYSE: VRX).  Valeant is best known for its skin cancer and epilepsy drugs, and the new company retained the name Valeant Pharmaceuticals International.  It was decided that Biovail’s shareholders would control 50.5% of the company, while Valeant’s would posses 49.5%.

The final price of the merger fell in the ballpark of $3.3 billion, with a price of $42.77 decided for Valeant’s shares.  The new company is said to have a yearly earnings of nearly $1.75 billion.

2010 Pharma Buyout # 5 –Piramal

Price Tag: $3.7 billion

Buyer:  Abbott

Piramal Healthcare Limited’s Healthcare Solutions business was acquired by Abbott Laboratories (NYSE: ABT) in May.  Piramal is a leader in the branded generics market of India, and the buyout made Abbott the top player in the Indian pharmaceutical market – one of the biggest areas of growth potential in the world.

Abbott agreed to an up-front payment of $2.1 billion for the Indian company, along with payments of $400 million for each of the next four years.  Along with the acquisition of Solvay Pharmaceuticals, Abbott has positioned itself as a major player in the global pharmaceutical community.

2010 Pharma Buyout # 4 – SSL

Price Tag: $3.9 billion

Buyer: Reckitt Benckiser

As much a consumer products company as a healthcare stock, Reckitt Benckiser (PINK: RBGPY) acquired SSL International in July to gain its profitable lines of Durex condoms and Dr. Scholl foot care products. As a result, Reckitt expanded its health and personal care revenue by nearly 36%.

The final price tag on the acquisition was around $3.9 billion, and Reckitt agreed to pay 33% more than each share’s actual price.  Reckitt bought out the British condom and insole producer in hopes to offset the drop in revenue expected when generic versions of Reckitt’s flagship drug Suboxone (a heroin-dependency drug) hit shelves after a an October patent expiration.

2010 Pharma Buyout # 3 – OSI

Price Tag – $4.0 billion

Buyer: Astellas

Japanese pharmaceutical company Astellas Pharma Inc (PINK: ALPMY) purchased the U.S. owned OSI Pharmaceuticals (NASDAQ: OSIP) in May.  OSI is known for its drug Tarceva, which is used to target pancreatic and lung cancer.  The acquisition gave Astellas, which is Japan’s second largest drug maker, a solid position in the U.S. market.

Astellas made an original offer of $3.5 billion for OSI, but later upped its offer to $4.0 billion, or $57.50 a share.  The deal came about one year after Astellas failed to acquire American heart-drug maker CV Therapeutics for $1.4 billion.

2010 Pharma Buyout # 2 – Ratiopharm

Price Tag: $4.9 billion

Buyer: Teva

Israeli drug maker Teva Pharmaceuticals (NASDAQ: TEVA) won the bidding war for German-owned Ratiopharm back in March. The acquisition makes Teva the world’s largest producer of generic drugs by sales. Ratiopharm is the world’s fourth largest generic drug maker, and was the largest in Germany — a country in which Teva previously had no position.

Ratiopharm was purchased for $4.9 billion, and the combined company will have revenue of approximately $16 billion. Teva outbid competitor Pfizer (NYSE: PFE), which proposed buying the German company for “only” $4.1 billion.

2010 Pharma Buyout # 1 – Millipore

Price Tag: $7.0 billion

Buyer: Merck

Pharmaceutical and chemical company Merck (NYSE: MRK) completed the acquisition of life science company Millipore on Feb. 28.  Millipore’s products and services are used for drug discovery, process development and drug manufacturing. Merck acquired Millipore for approximately $7.0 billion.

The companies decided on a price of $107 that was paid in cash per share for Millipore’s common stock. The buyout became official after Millipore’s shareholders approved the acquisition.

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