Sanofi acquires its US competitor Bioverativ for 11.6 billion USD

SanofiThe French pharmaceutical group Sanofi acquires its US competitor Bioverativ, which is specializing in the treatment of hemophilia. The deal was estimated at 11.6 billion USD and aims to strengthen the company’s profits and its presence in the treatment of rare diseases.

The acquisition occurs at a time of renewed interest from large pharmaceutical manufacturers to smaller biotech firms and some experts’ predictions that there will be a significant increase in mergers and acquisitions in 2018.

Sanofi has agreed to buy all Bioverativ shares for 105 USD per share in cash, which means a 64% premium against the closing price of Bioverativ on January 19.

Bioverativ was separated from Biogen at the beginning of last year.

The negotiated transaction marks Sanofi’s successful return to deals after failing to fight for a number of acquisitions in recent years. This is its biggest acquisition since 2011, when it bought the US biogas company Genzyme for about 20 billion USD. Sanofi failed to fight with its rival Pfizer for acquiring the cancer treatment company Medivation in 2016, as well as Johnson & Johnson for the acquisition of the Swiss biotech company Actelion last year.

“With Bioverativ, we are becoming the leader of the growing market for hemophilia treatment”, said the CEO of Sanofi, Olivier Brandicourt.

According to Sanofi, annual sales of the sector are about 10 billion USD, and worldwide about 181,000 people are struggling with the situation. The company adds that hemophilia is the largest market for rare diseases and is about to grow by over 7% annually by 2022.

Sanofi expects the acquisition to immediately increase earnings per share for the financial year 2018, and will raise it by up to 5% next year.

The company will fund the acquisition with a combination of existing cash resources and debt issuance.