Australia’s CSL Ltd (CSL), the world’s largest blood products company, said says it has agreed to buy Novartis AG’s global influenza vaccine business for $US275 million.
Combining the Novartis unit with CSL subsidiary bioCSL would create the No.2 player in the $US4 billion global influenza vaccine industry, CSL said in a statement to the ASX.
CSL said it would fund the deal with surplus cash and estimated integration costs at $US100 million, while synergies were seen at $US75 million a year by 2020.
CSL is already spending $US210 million upgrading its albumin production operations in Melbourne, and is about to start its seventh buyback in eight years at a cost of $US900 million.
The combined business is expected to hit sales of about $US1 billion annually over the next three to five years, CSL said.
The company will lag only pharmaceutical giant Sanofi, for influenza vaccine sales.
The Novartis influenza business had sales of $US527 million in the year ended December 31.
CSL YTD – CSL to purchase Novartis flu vaccine division
CSL chief executive Paul Perreault said the acquisition would give bioCSL a "global leadership position in an attractive sector we understand intimately".
"It will transform bioCSL by giving it first class facilities and global scale as well as product and geographic diversity," Mr Perreault said in a statement.
The combined business will have manufacturing facilities in the United States, United Kingdom, Germany and Australia.
"CSL has demonstrated its ability to make the most of specialist pharmaceutical acquisitions in areas we know well and this transaction has the potential to create a global platform for biaxial that is comparable in many aspects to our global protein science business," Mr Perreault said.
The deal is expected to be completed in about a year after regulatory approvals are sought.
Novartis announced it would sell its non-influenza vaccines to GlaxoSmithKline in April.
"In CSL, we have found not only an owner for the influenza business that shares our commitment to protecting public health, but also a strong growth platform for the business and our associates," Novartis chief executive Joseph Jimenez said in a statement.
CSL shares rose 1%, or more than 70 cents to close at $76.39.
