British pharma blue chip, AstraZeneca (LON:AZN), announced on Monday that it had entered into a definitive agreement to acquire Alexion Pharmaceuticals.
The company said that Alexion shareholders will each receive $60 in cash, and 2.1243 AstraZeneca American Depositary Shares for each Alexion share. Based on AZN’s reference average ADR price of $54.14, this implies a total consideration per share of $175, or $39 billion in total.
Subject to regulatory approval, the deal is expected to be completed by Q3 2021, at which point Alexion shareholders will own roughly 15% of the combined company.
Pascal Soriot, AstraZeneca CEO, commenting on the acquisition, saying: “Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases.”
“This acquisition allows us to enhance our presence in immunology. We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients,” he added.
Combining the two companies will bolster their collective immunology, iologics, genomics and oligonucleotides capabilities. The Group added that, “AstraZeneca, with Alexion’s R&D team, will work to build on Alexion’s pipeline of 11 molecules across more than 20 clinical-development programmes across the spectrum of indications, in rare diseases and beyond.”
Following the in-part shares-based acquisition, AstraZeneca shares shed 6.13%, down to 7,660p a share 14/12/20. While a short-term knock for those looking to quickly capitalise on potential COVID vaccine price gains, the acquisition increases AZN’s presence in the rare diseases space, and it will use its global presence to leverage Alexion’s portfolio, which already boasted $5.0 billion in revenues in 2019.
Analysts currently have a Hold stance on the stock, and a consensus target price of 8,491.76p, 10.85% ahead of its current level. The Group also have a dividend yield of 2.65%, and a p/e ratio of 40.42.