New Jersey-based healthcare giant Johnson & Johnson (NYSE: JNJ) agreed to acquire Swiss bio-pharmaceutical company Actelion Ltd. (SIX: ATLN) in a $30 billion all-cash deal, the companies said.

The tender offer transaction for $280 per share, which was unanimously approved by the Boards of Directors of both companies, is expected to be immediately accretive to Johnson & Johnson and accelerate its revenue and earnings growth rates. Johnson & Johnson will fund the acquisition with cash held outside the United States.

Actelion has established a leading franchise of differentiated, innovative products for pulmonary arterial hypertension (PAH) that is highly complementary to the existing portfolio of the Janssen Pharmaceutical Companies of Johnson & Johnson.

Founded in late 1997, with now over 2,500 dedicated professionals covering all key markets around the world including Europe, the US, Japan, China, Russia and Mexico, Actelion has its corporate headquarters in Allschwil/Basel, Switzerland.

Johnson & Johnson expects to retain Actelion’s presence in Switzerland and also leverage its complementary capabilities in shaping medical paradigms.

Immediately prior to the completion of the acquisition, Actelion will spin out its drug discovery operations and early-stage clinical development assets into a newly created Swiss biopharmaceutical company, R&D NewCo. The shares of R&D NewCo, which will be listed on the SIX Swiss Exchange (SIX), will be distributed to Actelion’s shareholders as a stock dividend upon closing of the tender. Johnson & Johnson will initially hold 16% of the shares of R&D NewCo and have rights to an additional 16% of R&D NewCo equity through a convertible note.

The arrangements will result in R&D NewCo launching with cash of CHF 1 billion to be made available at the closing of the transactions. Johnson & Johnson will also receive an option on ACT-132577, a product within R&D NewCo being developed for resistant hypertension currently in phase 2 clinical development.

R&D NewCo will be led by Actelion’s current scientific team with Jean-Paul Clozel, MD, Chief Executive Officer and founding member of Actelion, as Chief Executive Officer. Jean Pierre Garnier, Chairman of the Board of Actelion, will be Chairman of the Board of R&D NewCo.

“We believe this transaction offers compelling value to both Johnson & Johnson and Actelion shareholders,” said Alex Gorsky, Chairman and Chief Executive Officer of Johnson & Johnson. “Actelion has built an attractive, growing business with world-class commercial and clinical development capabilities.”

“I’m very proud that we have created such a unique value proposition through this structured transaction,’ Garnier said. “Actelion’s shareholders can monetize their holdings in Actelion at a highly attractive cash price of $280 per share, while at the same time retaining a significant stake in the future potential upside of Actelion’s earlier stage pipeline, through their ownership of R&D NewCo.”

“In making this offer, Johnson & Johnson is recognizing all that has been created at Actelion during the last 20 years, and in particular the quality of our PAH franchise, the potential of our key marketed medicines and our promising late-stage development assets,” Dr. Clozel said.

The transaction is expected to close by the end of the second quarter of 2017. Tax clearances in relation to the spin-off of R&D NewCo have been received from both the Swiss Federal and the Basel-Landschaft cantonal tax authorities. Jean-Paul Clozel has committed to tender all Actelion shares he owns into the offer and vote his shares in favor of the transaction.

Lazard is acting as lead financial advisor to Johnson & Johnson with Citibank also providing financial advice on certain matters. Cravath, Swaine & Moore LLP, Homburger AG and SextonRiley LLP are serving as legal advisors to Johnson & Johnson.
Bank of America Merrill Lynch is serving as Actelion’s lead financial advisor, with Credit Suisse also providing financial advice. Niederer Kraft & Frey, Wachtell, Lipton, Rosen & Katz, and Slaughter & May are serving as legal advisors to Actelion.

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