One of Belgium’s flagship companies UCB is set to purchase US based RA Pharmaceuticals in a $2.1 billion cash deal, as reported earlier today.
Early on Thursday morning, reports suggested that both parties had formalized a fee for RA which enables the Belgian Pharmaceutical giant access to new treatment opportunities in neurology and immunology.
UCB’s Chief Executive Officer Jean-Christophe Tellier expressed his optimism in this statement “Ra Pharma is an excellent strategic fit addressing multiple areas of UCB’s patient value growth strategy”
Tellier also added “Upon closing, the acquisition will add to our strong internal growth opportunities – six potential product launches in the next five years, strengthening our neurology and immunology franchises with late and early-stage pipeline projects. In addition, the combination will provide us with the opportunity to become a leader in treating people living with myasthenia gravis”
The newly formed acquisition is expected to give UBS access to US markets and contacts, whilst driving UCB’s earnings per share (EBR: UCB), and increasing profit from 2024 onwards.
As a result, shareholders of RA Pharma (NASDAQ: RARX) will receive $48 per share held, as reported in a joint statement from both parties. This figure represents a 93% premium based on the average closing stock price of RA prior to finalizing the takeover.
As the news came in of this deal, the price of RA Pharmaceuticals saw a premarket appreciation of 102.03% which shows the optimism from traders to invest into this merger. The stock price leveled during the course of the day at $22.80.
UCB have also benefitted today, seeing a small rise in their share price with a 1.46% increment.
The takeover presents a new challenge for UBS, with an attempt to integrate into a foreign markets. UBS look to have a long term plan in place, similar to Dechra Pharmaceuticals
However, this takeover comes at no surprise as UBS announced back in January their new strategic growth plan. As a result, UBS will strengthen their presence in the innovation sector of pharmaceuticals in Massachusetts.
The takeover will be funded by both existing cash resources and new term bank loans handled by Bank of America Merrill Lynch (NYSE: BAC) and BNP Paribas Fortis (EPA: BNP).