GlaxoSmithKline Plc (GSK,GSK.L) and Human Genome Sciences Inc. (HGSI) announced that they inked a definitive agreement under which GlaxoSmithKline will buy Human Genome Sciences for $14.25 per share in cash.
The transaction values Human Genome Sciences at around $3.6 billion on an equity basis, or approximately $3 billion net of cash and debt, and represents a premium of 99% to the the company's closing price of $7.17 per share on April 18, 2012. The boards of directors of both companies have approved the transaction.
GlaxoSmithKline noted that through complete ownership of BENLYSTA, albiglutide and darapladib, it can simplify and optimize R&D, commercial and manufacturing operations to advance these products most effectively and efficiently while securing the full potential long-term value of the assets.
GlaxoSmithKline expects to achieve at least $200 million in cost synergies to be fully realized by 2015, subject to appropriate consultation, and expects the transaction to be accretive to core earnings beginning in 2013. The company further also assessed the potential returns of this acquisition relative to its long-term share buyback program. As part of this ongoing program, GlaxoSmithKline continues to expect to repurchase 2 - 2.5 billion pounds in shares in 2012.
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