Novartis announced that shareholders of Chiron Corporation voted to approve its acquisition of Chiron, paving the way for the creation of a new division at Novartis focusing on vaccines and diagnostics.
At a special shareholder meeting held in Emeryville, California, over 85 per cent of the total 198 million votable shares were cast in favour of the proposed transaction, while 12 per cent were not voted, according to a preliminary count.
Under the terms of the transaction, Novartis will acquire all outstanding shares of Chiron that Novartis does not already own for USD 48 per share. The all-cash deal represents a total value of USD 5.4 billion. Annual cost synergies totalling USD 200 million are anticipated within three years after closing, with 50 per cent expected to be achieved in the first 18 months, a Novartis release said.
The merger certificate has been filed, with the merger to become effective as of 12:01 a.m. Eastern Daylight Time on Thursday, April 20, 2006.
"With the close of this transaction, Novartis will gain access to attractive strategic growth platforms in the dynamic vaccines market and the rapidly expanding diagnostics business. At the same time, Chiron will add to our pharmaceuticals pipeline, especially in our oncology franchise," said Dr. Daniel Vasella, Chairman and CEO of Novartis. "With innovative medicines at our core, complemented by generic drugs, over-the-counter treatments and now preventive medicines in the form of vaccines, Novartis offers a full spectrum of treatments, benefiting patients and physicians around the world," he added.
Novartis is creating a new division called Novartis Vaccines & Diagnostics, consisting of two businesses: Novartis Vaccines and a diagnostics business that will retain the Chiron name.
Dr. Joerg Reinhardt, CEO of Novartis Vaccines & Diagnostics said, "Novartis will strive to ensure that we provide our customers and patients with a safe and effective supply of vaccines, especially at a time when the world faces the potential threat of a global flu pandemic. By combining our skills and resources we will enhance manufacturing reliability and capacity while accelerating our ability to innovate."
Novartis Vaccines & Diagnostics will focus on continued improvements in quality assurance and making the necessary investments to upgrade manufacturing capabilities while exploring new technologies to increase the capacity and reliability of the manufacturing process.
While the Chiron blood testing business is already strong in the US, Novartis sees an opportunity to strengthen its position globally. To grow this business Novartis plans to make additional investments in R&D, and explore opportunities to expand in molecular diagnostics.
Chiron's Biopharmaceutical business will be integrated into Novartis Pharmaceuticals, where Chiron's products and pipeline will complement the in-market and development portfolios of Novartis in the respiratory, infectious diseases and oncology franchises. Included in Chiron's portfolio are products for the treatment of cystic fibrosis, renal/skin cancer and skin infections. Chiron's early-stage research will be incorporated into the Novartis Institutes for BioMedical Research (NIBR), which will maintain Chiron's existing research center in Emeryville, California.