An analysis of Johnson & Johnson-Actelion deal

The German economic and financial daily Handelsblatt published a long analysis of the agreement regulating the $30bn acquisition of Actelion by US-based Johnson & Johnson. According to the Frankfurt’s daily, the agreement is likely to provide a new standard for future acquisitions in the pharmaceutical business, in that it introduces concepts allowing new ways of addressing contentious issues between the parties during negotiation. Indeed, the agreement provides for the creation of a spin-off having Actelion’s R&D as asset and financed with $1bn in cash, with J&J holding as little as 16% of its shares. The acquisition is one of the most expensive among the recent M&A deals and increased the Swiss biotech’s valuation to 12 times its sales volume and to as many as 44 times its net profit. However, the deal has allowed J&J to secure a product portfolio with an enormous sales potential, analysts say. (Source Handelsblatt)