Type of information: Company acquisition
Acquired company: Actelion (Switzerland)
Acquiring company: Johnson&Johnson (J&J) (USA - NJ)
Amount: $ 30 billion
- • On March 31, 2017, Johnson & Johnson announced that its Swiss subsidiary, Janssen Holding GmbH, published the provisional notice of the interim result of its all-cash public tender offer in Switzerland to acquire all publicly held shares of Actelion for $280 per share, payable in U.S. dollars, per the offer prospectus of February 16, 2017 . At the expiration of the main offer period on March 30, 2017 , a total of 78,629,955 Actelion shares were tendered, corresponding to 73.25% of the 107,339,642 Actelion shares covered by the tender offer. Including the Actelion shares tendered, Janssen and Actelion , a person acting in concert with Janssen, held as of the end of the main offer period 83,195,346 Actelion shares, corresponding to 77.20% of the voting rights and the share capital of Actelion .Subject to the satisfaction of certain conditions, Janssen has declared the tender offer successful. The additional acceptance period of ten trading days (at the SIX Swiss Exchange ) for the subsequent acceptance of the tender offer will commence on April 6, 2017 and expire on April 21, 2017 .
Johnson & Johnson also announced that the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, with respect to Janssen's proposed acquisition of Actelion have either expired or been terminated early. The Japan Fair Trade Commission and the Israeli Antitrust Authority have cleared the proposed acquisition of Actelion .
Based on the current understanding of the regulatory approval proceedings in different jurisdictions, the settlement of the tender offer is expected to occur, subject to the satisfaction of all relevant conditions to the tender offer, including regulatory approvals, in the second quarter of 2017.
As part of the transaction, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company (Idorsia Ltd ). The shares of Idorsia Ltd are expected to be distributed to Actelion's shareholders as a dividend in kind and listed on the SIX Swiss Exchange on the day of the settlement of the tender offer. Johnson & Johnson will initially hold 16 percent of the shares of Idorsia Ltd and have rights to potentially increase to 32 percent through a convertible note.Johnson & Johnson will also receive an option on ACT-132577, a product being developed for resistant hypertension currently in phase 2 clinical development.The new company will be led by Actelion's current scientific team with Jean-Paul Clozel, MD, Chief Executive Officer and founding member of Actelion, as Chief Executive Officer. Jean Pierre Garnier, Chairman of the Board of Actelion, will be the Chairman of the Board.
- • On January 26, 2017, J&J and Actelion announced that they have entered into a definitive transaction agreement under which J&J will launch an all-cash tender offer in Switzerland to acquire all of the outstanding shares of Actelion for $280 per share, payable in U.S. dollars, which equates to CHF 280.08 per share as of January 25, 2017. The transaction, which was unanimously approved by the Boards of Directors of both companies, is expected to be immediately accretive to J&J adjusted earnings per share and accelerate J&J revenue and earnings growth rates. J&J will fund the transaction with cash held outside the United States.
The transaction will deliver a significant and immediate premium to Actelion shareholders, with greater value certainty as compared to Actelion's standalone prospects. Actelion shareholders are also expected to realize substantial additional value from their ownership interest in R&D NewCo.
The transaction is expected to be immediately accretive to Johnson & Johnson earnings per share and accelerate Johnson & Johnson revenue and earnings growth rates, while enhancing long-term growth and value creation of the Janssen Pharmaceuticals business. Post-transaction close, Johnson & Johnson expects the transaction to increase its long-term revenue growth rate by at least 1.0% and its long-term earnings growth rate by 1.5% - 2.0% above current analyst consensus. Johnson & Johnson estimates EPS accretion in the first full year of $0.35 to $0.40. Johnson & Johnson shareholders are also expected to realize additional value from the Johnson & Johnson ownership interest in R&D NewCo.
The transaction is expected to close by the end of the second quarter of 2017. The Pre-Announcement including the conditions of the tender offer is being published concurrently with this press release. J&J intends to file a prospectus and commence the tender offer by mid-February 2017. In addition, Actelion will convene an Extraordinary General Meeting (EGM) for shareholders to approve the distribution of shares of R&D NewCo by way of a dividend in kind to Actelion's shareholders upon closing of the tender offer. The EGM is expected to be held in the second quarter of 2017. The transaction is conditioned upon:
At least 67% of all Actelion shares that are issued and outstanding at the end of the offer period, which may be extended, tendering into the offer;
The approval of the Actelion shareholders of the distribution of the shares of R&D NewCo at the EGM called for this purpose; and
Further customary offer conditions described in the offer prospectus, including regulatory approvals.
Lazard is acting as lead financial advisor to J&J with Citibank also providing financial advice on certain matters. Cravath, Swaine & Moore LLP, Homburger AG and SextonRiley LLP are serving as legal advisors to J&J.
Bank of America Merrill Lynch is serving as Actelion's lead financial advisor, with Credit Suisse also providing financial advice. Niederer Kraft & Frey, Wachtell, Lipton, Rosen & Katz, and Slaughter & May are serving as legal advisors to Actelion.
- • On December 21, 2016, Actelion has entered into exclusive negotiations with J&J regarding a possible strategic transaction. There can be no assurance any transaction will result from these discussions. Actelion does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so, or a formal agreement has been reached.
• On December 14, 2016, Actelion has taken note of the announcement by Johnson & Johnson (J&J) and confirms that J&J has withdrawn from the discussions. Actelion is engaged in discussions with another party regarding a possible strategic transaction. There can be no certainty at this point that any transaction will result. No further statement will be made until such time Actelion deems appropriate to make an announcement.
- • On November 25, 2016, Johnson & Johnsonconfirmed it is engaged in preliminary discussions with Actelion Pharmaceuticals regarding a potential transaction.There can be no assurance any transaction will result from these discussions. Johnson & Johnson does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so, or a formal agreement has been reached.
Details: Actelion has established a leading franchise of differentiated, innovative products for pulmonary arterial hypertension (PAH) that is highly complementary to the existing portfolio of the Janssen Pharmaceutical Companies of J&J. This franchise includes Opsumit®, Uptravi®, Tracleer®, Veletri® and Ventavis®. Through the proposed transaction, Johnson & Johnson will also acquire Actelion's other marketed products, including Valchlor® and Zavesca® as well as global rights to ponesimod, an S1P1 receptor modulator in phase 3 development for multiple sclerosis, and cadazolid, a novel antibiotic in phase 3 development for Clostridium difficile-associated diarrhea.
The addition of Actelion's specialty in-market medicines and late-stage products is consistent with J&J's efforts to grow in attractive and complementary therapeutic areas and serve patients with serious illnesses and significant unmet medical need. In addition, the transaction structure will provide J&J flexibility to accelerate investment in its industry-leading, innovative pipeline to drive additional growth. Further, J&J expects to retain Actelion's presence in Switzerland and also leverage its complementary capabilities in shaping medical paradigms.
As part of the transaction, immediately prior to the completion of the acquisition, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company. The shares of this company,which will be listed on the SIX Swiss Exchange (SIX), will be distributed to Actelion's shareholders as a stock dividend upon closing of the tender. J&J will initially hold 16% of the shares of the company and have rights to an additional 16% of its equity through a convertible note.
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