French drugmaker Sanofi is in talks to buy Actelion, Europe's largest biotech company, in a deal potentially worth $3 billion (€2.82 billion), according to two sources.
This comes after Johnson & Johnson abruptly walked away from talks with the Swiss company, the second time in less than two years that the world’s largest healthcare group has failed to complete a transformation deal.
Talks between Sanofi and Actelion could yet fall apart, cautioned the people informed about the situation. However, one person close to the Swiss group said the French company had emerged as a more serious buyer than the US suitor.
J&J’s decision to abandon negotiations was mainly a result of failing to reach an agreement over price, said a source close to the US group.
According to two people briefed about the negotiations, J&J had offered Switzerland-based Actelion about $250 a share, valuing the company at more than $27 billion. Shares in Actelion closed at about $210 on Tuesday.
An acquisition of Actelion would have allowed the US group to bolster its pharma franchise. J&J said in a statement on Tuesday night that it had been unable to reach a deal that would have created value for its shareholders.
Last year, J&J lost out to AbbVie in the $21 billion contest for Pharmacyclics.
Two people close to the company’s top management said that J&J, which has a cash-rich balance sheet, remains firmly committed to securing a big deal in 2017, but at the right price. Last January, J&J said it had more than $18 billion of cash to spend on potential deals.
Retain control
Jean-Paul Clozel, Actelion’s chief executive and founder, who has historically been resistant to selling the biotech group, had of late opened up to the possibility of a deal that would allow him to retain control of the company.
The Financial Times reported last month that Actelion was open to setting up a complex structure that would have left it independent.
Actelion’s proposed structure would have created a new, larger biotech group uniting the Swiss company with relevant parts of J&J’s pharma business, people involved in the talks said.
J&J would have become a major shareholder in the new company and could have been asked to add some cash to complete the deal, these sources added.
A source close to J&J’s management said the company did not walk away from the deal because of the structure proposed by Actelion. The source stressed that the disagreement was purely over price.
Actelion’s stubbornness over price had suggested that there could be other potential buyers interested in bidding for the biotech group.
Roche, the Swiss drugmaker, has often been mentioned by analysts as a possible acquirer of Actelion, given the close ties between the companies. Mr Clozel was an executive at Roche before founding Actelion with his wife, Martine, and others in 1997.
Bloomberg reported last week that Sanofi, the French drugmaker, was considering making a bid.
