J&J to buy Switzerland’s Actelion for $30 Billion

Johnson & Johnson (NYSE: JNJ) announced to buy Swiss drugmaker Actelion Ltd. in a deal worth $30 billion, a move to get more exposure to rare disease medicines.

Under the deal, J&J will pay $280 per share, or 280.08 Swiss francs, in cash for Actelion’s outstanding shares. It represent a 23 percent premium to Actelion’s closing price on Wednesday. At the same time, Actelion will spin out its research and development operation into a new publicly traded company. J&J will hold a 16 percent stake in the new company.

Actelion share jumped 20 percent on the Swiss SIX Exchange, while J&J shares were flat in the early trading in New York.

“We’re going to be able to apply considerably more global, clinical development, regulatory, commercial, reimbursement resources, to take the very strong foundation that Actelion has built, demonstrating 20 percent plus growth rates, and really take that to the next level,” Chief Executive Officer Alex Gorsky said on a conference call with analysts.

J&J said the transaction is expected to completed by the end of the second quarter and it expected the deal will immediately add to the company’s earnings and boost the growth of revenue with synergies. J&J also said the acquisition is funding with cash it holds oversea. J&J held $38.2 billion in cash and equivalent securities outside the U.S. as of Jan.3, 2016.

“We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders,” Alex Gorsky, J&J chairman and chief executive, said in a statement.

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