Spain’s Grifols buys rival Biotest for up to $ 1.9 billion

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Grifols’ drug is on display at its headquarters in Sant Cugat del Valles, near Barcelona, ​​Spain on May 25, 2018. REUTERS / Albert Gea

MADRID, September 17 (Reuters) – Spanish pharmaceutical company Grifols (GRLS.MC) on Friday offered a € 1.6 billion ($ 1.9 billion) buyout of German rival Biotest (BIOG.DE) , in order to consolidate the plasma-based drug industry.

Grifols said it has agreed with Tiancheng International Investment to buy the Hong Kong-based company’s majority stake in Biotest for € 1.1 billion. He also offered to buy the remaining shares traded on the Frankfurt stock market.

The Barcelona-based company has agreed to buy 89.88% of the ordinary shares of Biotest which carry voting rights, but which only represent 44.54% of the company’s capital, and an additional 0.54% of the capital in non-voting preferred stock in Hong Kong. based in Tiancheng.

Grifols will then offer minority shareholders of Biotest 43 euros per ordinary share, a premium of around 22% over Thursday’s closing price, and 37 euros per preferred share.

If all the shareholders contributed their shares, Grifols would pay a total of 1.6 billion euros for Biotest.

Biotest common stock was trading near the price offered by Grifols, while Grifols shares were down 1.6% to 20.31 euros by late morning.

The agreement “will expand our existing portfolio of plasma-derived therapies and accelerate the development of new products,” Grifols co-CEO Raimon Grifols Roura said in a statement.

The merger would increase the family business’s profit before interest, taxes and depreciation by € 300m in 2024 and € 600m in 2026, said co-CEO Victor Grifols on a call with analysts .

“Overall, we believe the deal makes strategic sense and that continuing to expand internationally and consolidate the existing plasma oligopoly should help reassure about Grifols’ ability to overcome impending competitive pressures. “Deutsche Bank said in a note to investors on Friday.

The agreement will also strengthen Grifols’ capacity to collect plasma, a bottleneck for its development, thanks to Biotest’s 26 European plasma centers.

The company plans to complete the merger by the end of the first half of 2022 after overcoming all regulatory hurdles.

($ 1 = € 0.8495)

Reporting by Inti Landauro Editing by Mark Potter and David Evans

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