Switzerland’s number one drugmaker Novartis has succeeded in its bid to buy the remainder of US vaccines maker Chiron, after a new offer, $600 million higher than its original bid of $4.5 billion [[01/09/05a]], was unanimously accepted by the latter’s independent directors.
Novartis already holds a 42% stake in Chiron, which generated sales of $1.7 billion and pro-forma net profit of $152 million last year, and first moved to acquire the remaining portion in September with a $40-a-share bid, which Chiron considered inadequate. Subsequent wrangling placed the deal in danger, and many doubted whether it would go actually go ahead, especially after Novartis’ chief executive, Dan Vasella, warned during an interview with Swiss newspaper Le Temps that, "if we don't find common ground, well, it won't happen." [[26/09/05b]]
The acquisition of Chiron should prove a welcome addition to the Novartis stable, and the company says it intends to turn around US group, which has been dogged with vaccines production problems and subsequent supply issues. According to Novartis, the transaction will strengthen Chiron's capabilities to better meet the needs of patients with high-quality vaccines, as well as provide the Swiss firm with entry into this high-growth market. “Our plan is to turn around the Chiron vaccines business, which will require investments in R&D and manufacturing to increase quality and capacity,” noted Mr Vasella.
In addition to vaccines, the move will also provide Novartis with access to Chiron's blood testing business, which offers strong near-term growth opportunities and potential for access to the emerging growth segment of molecular diagnostics. Furthermore, geographic expansion outside the US and development of new products should ensure future growth, the group noted.