Johnson & Johnson is reported to have approached Swiss drug maker Actelion Ltd. about a $17 billion takeover as the healthcare giant based in the U.S. looks to expand its lineup of pharmaceutical products, said people close to the situation.
Talks are in the early stages following the initial J&J offer said those close to the matter who asked to remain anonymous due to the talks still being private. Actelion has hired an adviser to explore its options and the talks might not lead to any sales, said those same people.
Nevertheless, Actelion shares soared by their most in over two years. Actelion, the largest biotech company in the Europe, has been considered a takeover target for a number of years, but its co-founder and CEO Jean-Paul Clozel previously has said the company was planning to stay independent.
The CEO, who is 61, is one of the largest shareholders of Actelion and might be more open now to a takeover if the premium is sufficient enough said one of those close to the situation.
This acquisition would increase the pharmaceutical deals for 2016 that currently have reached $246 billion.
Shares of Actelion were up almost 10% in Friday trading in Europe at midday, which was that biggest increase since June of 2014.
Shares in 2016 had risen by 13% through Thursday’s trading, which valued the company at nearly $17 billion.
J&J, based in New Brunswick, New Jersey, has a market capitalization of close to $308 billion, and increased in 2016 by 10%.
J&J CFO Dominic Caruso said he is willing to consider deals of all sizes that would fit into the company strategy of increasing its three main segments of consumer, pharmaceuticals, and medical devices.
The company in September agreed to acquire Abbott Laboratories’ unit of eye-surgery equipments at a cost of $4.33 billion.
Actelion has entered into the market two new treatments for lungs that are expected to be blockbusters over the upcoming 36 months.
That would help to lower the company’s dependence it now has on Tracleer, its medicine that treats a special form of high blood pressure affecting lungs, which represented over 50% its revenue in 2015.
Tracleer sales might plunge after less expensive copycats are introduced into the market during the first three months of 2017. At the same time, revenue generated by Opsumit is expected to pass $1 billion in 2017.
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