King Pharmaceuticals to acquire Alpharma for approximately $1.6 billion
King Pharmaceuticals, Inc. and Alpharma, Inc. have announced a merger agreement under which King will acquire all of the outstanding shares of Class A common stock of Alpharma for $37 per share in cash, for a total equity value of approximately $1.6 billion.
"Together, we will be better positioned to deliver superior value to our stockholders and significant benefits to employees of both companies," said Brian A. Markison, chairman, president and chief executive officer of King. "In addition, the transaction will create a stronger platform to deliver innovation to our customers."
Under the terms of the merger agreement, King's tender offer for all of the outstanding shares of Class A common stock of Alpharma, which had been scheduled to expire at 5 p.m. EST Friday, will be extended through 5 p.m. Friday, Dec. 19, unless further extended in accordance with the merger agreement.
King's amended offer will be filed with the Securities and Exchange Commission and mailed to Alpharma stockholders. Alpharma's board of directors has recommended that Alpharma stockholders tender their shares into King's amended offer.
"After careful evaluation, our board determined that a combination with King is in the best interest of our shareholders and provides them immediate access to this value," said Dean Mitchell, Alpharma's president and chief executive officer. "We believe the combined company has a compelling strategic logic and will create a strong company for both shareholders and employees."
King officials said Alpharma's animal health division will increase the diversification of King's business and is expected to provide steady cash flow to fuel future strategic initiatives, much like its Meridian auto-injector franchise.
The transaction will be accretive to King's diluted earnings per share, excluding any special items, in the second full year following completion of the transaction. The company anticipates achieving synergies of $50 million to $70 million over the same time period.
The transaction is scheduled to be complete by the end of 2008, and the boards of directors of both companies have unanimously approved the transaction.
