Fresenius to acquire US drug-maker APP Pharmaceuticals in US$3.7 billion deal

08-Jul-2008

Fresenius SE said Monday that it reached a deal to buy U.S. generic drug maker APP Pharmaceuticals in a US$3.7 billion deal that will give the German company more opportunities in the North American intravenously administered drug market.

Bad Homburg-based Fresenius SE will pay US$23 in cash for each share of APP Pharmaceuticals Inc. in the deal, along with a registered and tradable contingent value right that could result in as much as US$6 a share, provided APP reaches adjusted pretax profit targets from 2008 to 2010, the companies said in a statement.

APP will be merged with the U.S. subsidiary of Fresenius Kabi, the companies said, adding that APP founder Dr. Patrick Soon-Shiong, who holds more than 80 per cent of APP's stock, was on board for the deal.

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"The combined company will allow for the rapid globalization of APP's portfolio with the same high levels of quality and patient commitment for which we have become known, while at the same time providing a more comprehensive and complementary offering of injectable pharmaceuticals, devices and delivery systems to customers worldwide," Soon-Shiong said in a statement.

Schaumburg, Illinois-based APP employs some 1,400 workers and operates production facilities in New York, Puerto Rico, Toronto and Illinois. Its drug portfolio includes more than 100 products used for oncology, intensive care and anesthesia, along with fighting infections.

In 2007, APP reported sales of US$647 million on a pretax profit of US$253 million.

"APP is a fast-growing, highly profitable company and a strong management team that has an excellent market position in the U.S.," Fresenius CEO Ulf Mark Schneider said in a statement. "Our firm very much shares APP's dedication to quality and medical excellence for the benefit of patients. The acquisition provides significant growth opportunities for Fresenius Kabi."

He said the addition of APP will let Fresenius Kabi be able to "market its product range in the U.S. Fresenius Kabi's international marketing and sales network will allow us to sell APP's products globally."

Fresenius employs more than 116,000 workers worldwide and last year posted sales of US$17.9 billion.

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