The Swiss pharmaceuticals group Novartis has reached an agreement to complete a takeover of the US biotechnology firm Chiron, one of the world's largest producers of influenza vaccines.
Novartis said in a statement that it had concluded a deal with Chiron to acquire all the remaining shares in the US company for $5.1 billion. In September, Chiron had rejected a $4.5 billion dollar bid from Novartis for the 58% stake that the Swiss giant did not yet own.
However, the Swiss group announced today that Chiron's board of directors had approved the merger and recommended that shareholders take up the offer.
Today's deal is the second big acquisition this year by Novartis following the €5.65 billion takeover of German-US generic drugs make Hexal and Eon announced in February. In July, the Swiss giant also bought the rights to a batch of over-the counter products from US rival Bristol-Myers Squibb for $660m.
'Our plan is to turn around the Chiron vaccines business, which will require investments in research and development, and manufacturing, to increase quality and capacity, so that we can better meet customer demand and address public health needs,' Novartis chairman and CEO Daniel Vasella said.
Chiron is rated as the world's fifth-biggest maker of vaccines. Citing industry surveys, Novartis predicted that the overall global vaccines market would more than double its sales from about $9.6 billion in 2004 to over $20 billion in 2009.
The takeover takes place amid growing concern about a possible influenza pandemic, and a worldwide shortage of flu vaccine manufacturing capacity. Earlier this month, the US government awarded Chiron a $62.5m contract to manufacture a human vaccine against the potentially deadly H5N1 strain of avian influenza.
Apart from influenza vaccines, Chiron's product portfolio also includes vaccines against meningitis, rabies, tick-borne encephalitis, polio, mumps, measles and rubella (MMR) as well as diphtheria, tetanus and whooping cough. The vaccines business will form an entirely new division of Novartis, while Chiron's biopharmaceuticals will be absorbed into the Swiss group's existing pharmaceuticals business.
