UCB SA, the Belgian maker of the allergy drug Zyrtec, agreed to buy Germany's Schwarz Pharma AG for 4.4 billion euros (US$5.6 billion) in cash and stock to gain medicines for Parkinson's disease, epilepsy and bladder control.
Shareholders of Schwarz will get 91.10 euros a share, Schwarz said in an e-mailed statement.
That's 20 percent more than the closing price on Friday. The Schwarz-Schuette family, which owns 60 percent of the drugmaker, backed the offer.
Schwarz is the third European family drugmaker to sell in less than a week as the cost of developing new products swells and older ones face generic competition. UCB will get three new drugs that may garner more than 2 billion euros a year in sales, including a patch for Parkinson's disease.
"Schwarz Pharma and UCB are direct competitors with a focus on diseases of the central nervous system," Alexander Groschke, head of equities research at Landesbank Rheinland-Pfalz, said in a note to clients. "Together they will be a world leader in neurology."
Schwarz, the first company to introduce a generic version of AstraZeneca Plc's ulcer drug Prilosec, is shifting from marketing medicines to developing its own products. Shareholders will get 50 euros a share in cash and 0.8735 UCB shares. Chief executive officer Patrick Schwarz-Schuette will get a seat on the board of the enlarged UCB.
UCB shares fell 1.99 euros, or 4.2 percent, to 45.05 euros at 9.04am in Brussels. Those of Schwarz climbed 11.3 euros, or 15 percent, to 87 euros.
UCB is relying on new medicines such as the epilepsy drug Keppra and Crohn's disease treatment Cimzia to spur growth.
Chief executive officer Roch Doliveux has helped focus the company with the purchase of UK biotechnology company Celltech Group Plc in 2004 and last year's sale of the chemicals unit.
"The management of UCB has already proven, through the acquisition of Celltech and other transactions, that it's in a position to successfully acquire and integrate a complementary business," Doliveux said in yesterday's statement.
The companies expect the transaction to generate annual cost savings of more than 300 million euros within three years.
The new company will have annual sales of more than 3.3 billion euros and a research and development budget of 770 million euros a year. UCB plans to sell new shares to help pay for the takeover.
The announcement comes just days after family holders of Serono SA, Europe's largest biotechnology company, agreed to sell their stake to Merck KGaA, controlled by the descendants of founder Friedrich Jacob Merck, in a deal valued at 10.6 billion euros.
Altana AG, controlled by the billionaire Quandt family, also agreed last week to sell its drug unit to Danish pharmaceuticals company Nycomed Holding AS for 4.5 billion euros.
Family shareholders are seeking consolidation as drugmakers grapple with the rising cost of developing new medicines and increasing competition from generics. Schwarz's shares had gained 41 percent in the year ended Sept. 22 amid speculation it could become a target as consolidation sweeps the German market.
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