GlaxoSmithKline plc and ID Biomedical Corporation have entered a definitive agreement for GSK to acquire ID Biomedical, an integrated biotechnology company involved in the manufacturing and development of innovative vaccine products, including influenza vaccines. ID Biomedical will become a wholly-owned subsidiary of GSK. ID Biomedical has facilities in Canada and in the United States.

Under the terms of this agreement, the shareholders of ID Biomedical will be entitled to receive CDN$35 per share for a value of approximately CDN$1.7 billion [US$1.4 billion-GB£0.8 billion]. This represents a premium of 13 per cent over the closing price of the shares on 6 September 2005, and a premium of 30 per cent over the 20-day average share price. At closing, GSK will also assume responsibility for ID Biomedical's net debt which was US$77 million at June 30, 2005.

The acquisition, which has been approved unanimously by both GlaxoSmithKline and ID Biomedical's Boards of Directors, is subject to the approval of ID Biomedical's shareholders, applicable regulatory clearances and certain other conditions. The transaction is expected to close by the end of 2005 or early 2006.

ID Biomedical is currently in the process of expanding and upgrading its Canadian manufacturing facilities, which are expected, beginning in 2007, to produce around 75 million doses per year of ID Biomedical's Fluviral egg based influenza vaccine.

"GSK has moved quickly over the past few months to meet the growing demand for flu vaccines worldwide and to transform GSK into one of the leading global influenza vaccine manufacturers," Jean-Pierre Garnier, CEO of GSK said adding, "The proposed acquisition of ID Biomedical is a unique strategic opportunity to increase current capacity of classic flu vaccines, to provide us with increased capacity for next generation flu vaccines under development and to help GSK prepare for the threat of a flu pandemic."

According to a GSK release, in addition to acquiring an influenza vaccine business with sales to the Canadian public market, this transaction would enhance GSK's vaccine presence in the US where Fluarix, GSK's existing influenza vaccine, received FDA approval at the end of August. ID Biomedical's Fluviral has been granted fast track status by the US Food and Drug Administration (FDA) and is eligible for priority review.