Australia’s CSL to Buy Drugmaker Vifor for $11.7 Billion

(Bloomberg) -- Australian biotech company CSL Ltd. agreed to buy Swiss drugmaker Vifor Pharma AG for an equity value of $11.7 billion to add treatments for kidney disease and iron deficiency. 

CSL is offering to buy all publicly held Vifor shares for $179.25 each -- the equivalent of 167 francs apiece. That’s a premium of 40% to the 60-day average price of the stock as of Dec. 1, CSL said Tuesday.

The acquisition is the largest to date by CSL, which is Australia’s sole manufacturer of AstraZeneca Plc’s Covid-19 vaccine. The takeover extends the Melbourne-based company’s reach beyond flu shots and plasma collection.

Renal disease is a large, growing market, while chronic kidney disease has increased steadily over the past decade, CSL said. The combined group will have 37 products in development, 32% more than CSL’s current pipeline. 

Vifor shares rose as much as 14% to 160.5 francs in morning trading, extending Monday’s 18% gain.

The takeover will push the value of global M&A in the health-care and pharma sectors past its all-time record. Prior to the deal, globally, there have been more than $472 billion of transactions in those sectors in 2021, data compiled by Bloomberg show. That’s up more than 50% on the same period last year, and just below the record of $474 billion in 2019.

CSL Chief Executive Officer Paul Perreault said the transaction would immediately boost earnings. The price is $12.3 billion including assumed debt.

CSL will fund the acquisitioin partly through a fully underwritten institutional placement of $4.5 billion. The company will also undertake a share-purchase plan for Australian and New Zealand shareholders to raise as much as $534 million.

The value of Australian mergers and acquisitions this year topped all-time records as early as September.

The tieup reunites Vifor Chief Executive Officer Abbas Hussain with CSL, where he was a board member until June this year. Both companies confirmed discussions regarding a potential deal on Dec. 13, sending the Swiss company’s shares soaring.

Hugh Dive, chief investment officer at CSL shareholder Atlas Funds Management in Sydney, said CSL was in the minority of Australian companies that have a “very good” offshore acquisition record. “Most investors will give them the benefit of the doubt,” he said.

©2021 Bloomberg L.P.