Grifols SA (GRF) won tentative U.S. antitrust approval to buy Talecris Biotherapeutics Holdings Corp. (TLCR) for $4.09 billion after agreeing to sell some assets, reducing the number of major companies in the blood-plasma industry to three.
Grifols will sell two plasma collection centers, Talecris’s Koate blood-protein unit and a Melville, New York, plant under a consent agreement with the staff of the Federal Trade Commission, the companies said in a statement today. The accord is subject to approval by the five-member commission, they said. Grifols rose the most in five months in Madrid trading.
The deal gives Barcelona-based Grifols, Europe’s largest maker of blood-plasma products, a bigger share of the $7 billion U.S. market for blood-based infusions. The company will compete with Baxter International Inc. (BAX) and Melbourne-based CSL Ltd. (CSL), which scrapped a proposed $3.1 billion acquisition of Talecris in 2009 following FTC objections.
“We are happy about the announcement as it’s a very significant step, but we still need to wait for the final approval,” Deputy Chief Financial Officer Nuria Pascual said in a telephone interview. She said Grifols expects a decision in three or four weeks.
The U.S. now accounts for about a third of Grifols’s sales. The acquisition of Research Triangle Park, North Carolina-based Talecris would increase that to two-thirds, Pascual said on Nov. 5. Grifols would have had to pay Talecris a $375 million breakup fee if the FTC had blocked the deal.
Grifols gained 71 cents, or 5.3 percent, to 14.08 euros at the 5:30 p.m. close of trading in Madrid, the biggest gain since Dec. 3. The stock has returned 50 percent in the past year including reinvested dividends.
Talecris holders will receive about $32.58 a share in cash and stock in the sale, based on Grifols’ closing price today. Talecris rose 87 cents, or 3.1 percent, to $28.79 at 4 p.m. New York time in Nasdaq Stock Market trading.
“The remedies are those expected by the market and could mean a final approval in the short term,” Eduardo Coelho, an analyst at Banco BPI in Porto, Portugal, said by telephone. Even as “the approval seems to be clear, the financial conditions are still unknown, which still generates uncertainty.”
Grifols will sell the assets to Kedrion SpA of Italy and provide contract manufacturing, according to the statement. It will also operate the Melville plant for as many as four years under a lease agreement. Koate is a plasma-derived product to treat hemophilia, a disorder in which the body lacks blood- clotting proteins.
The forecast of about $230 million in operating savings from the Talecris purchase won’t be affected by the consent agreement or the arrangements with Kedrion, the company said.
Grifols agreed to pay $19 in cash and 0.6485 of a Grifols non-voting share for each Talecris share. The companies sweetened an original offer of $19 in cash and 0.641 of a share to settle a lawsuit by Talecris shareholders, according to the filing in November. Talecris board members and Cerberus Partners LP, the company’s biggest shareholder with a 49 percent stake, will receive the original terms.
Grifols agreed to buy Talecris on June 7 to gain brands such as Gamunex, a treatment for three immune system disorders, and Prolastin, the leading treatment for emphysema patients who were born with a protein deficiency. Talecris said at the time it still planned to proceed with an $800 million expansion of its blood-plasma production capacity.
“This represents great news for Grifols because the agreement is very favorable for it,” Sebastien Malafosse, an analyst at Bryan Garnier & Co., said by phone from Paris. “One could have expected bigger divestments, selling products or fewer synergies, but that’s not the case. It’s almost a blue-sky scenario going forward.”
Talecris was created in 2005 when Bayer AG sold its plasma business for about $590 million to New York-based Cerberus Capital Management LP and Ampersand Ventures of Wellesley, Massachusetts. The plasma-product maker raised $950 million in an initial public offering in 2009, and had $605 million in long-term borrowings as of March 31 this year.
Grifols sold shares in an initial public offering in 2006. The company was founded in 1940 by a Spanish hematologist, Jose Grifols Roig. His son, Victor Grifols Lucas, owns 6.2 percent of the company’s shares, while his grandson, Victor Grifols Roura, is chairman and CEO and holds 0.2 percent of shares.
Plasma is the watery, yellow liquid that carries blood cells. Grifols, Talecris, Baxter and CSL pay healthy people to donate plasma at collection centers across the U.S., then spin it in centrifuges to extract products such as immunoglobulins, albumin and blood-clotting proteins for treating hemophilia.
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