Big Swiss Drug Company to Acquire Syntex Corp. in $5.3 Billion Deal
PALO ALTO, Calif. (AP) _ Syntex Corp., a pioneering drugmaker founded by scientists who developed oral contraceptives, will be acquired by Switzerland’s Roche Holding Ltd. in a deal valued at $5.3 billion, the companies said today.
It was one of the largest takeovers announced this year and comes against a background of rapid change in the U.S. pharmaceutical industry, where health- care reform is forcing drugmakers to align themselves with powerful partners.
Under the deal, Syntex shareholders would receive $24 per share of common stock, representing a premium of about 57 percent over last Friday’s closing price on the New York Stock Exchange.
The company’s stock surged $8.25 by this afternoon to $23.50 in extremely heavy trading. More than 16 million shares had traded hands by early afternoon.
Roche’s tender offer is subject to certain conditions, including acquisition of a majority of Syntex shares and government approval.
Syntex’s board of directors has approved the merger agreement and is recommending stockholders tender their shares and vote in favor of the merger.
″Given the speed of changes in the industry and a radically different competitive situation, we ultimately felt the need to align with a strong global partner. We now strongly believe that the sale of Syntex to Roche would be in the best interests of our shareholders, our customers and our employees,″ said Paul Freiman, Syntex chairman and chief executive officer.
″The proposed combination of our companies would help us see that patients everywhere have access to the new drugs we have discovered and are developing,″ Freiman said.
Syntex is involved in developing, manufacturing and marketing prescription pharmaceutical products, animal health products and medical diagnostic systems.
The company’s scientists-founders invented the birth-control pill in the 1950s. It has more than 9,000 employees, with research subsidiaries in Palo Alto and overseas in Scotland, Mexico, and Japan. Syntex’s leading prescription pharmaceutical products are naproxen, a medication to treat inflammation and pain, and the pain reliever Toradol.
Other Syntex products include medicines to treat allergies and cardiovascular diseases.
Total worldwide sales in fiscal 1993 were $2.1 billion, 70 percent of that in the United States. Pharmaceutical sales accounted for approximately 85 percent of Syntex’s worldwide sales. Syntex’s net income in fiscal 1993 was $287 million.
The international Roche Group is a leader in research-based healthcare with activities in pharmaceuticals, diagnostics, vitamins and fine chemicals and fragrances and flavors.