Almost one year to the day after Fresenius plunked down $4.3 billion to acquire Illinois-based Akorn Pharmaceuticals, the German company announced it was walking away from the deal.
Almost one year to the day after Fresenius plunked down $4.3 billion to acquire Illinois-based Akorn Pharmaceuticals, the German company announced it was walking away from the deal.
Shares of Akorn Pharmaceuticals plummeted about 35 percent in early trading following the announcement. Shares of Akorn are trading at $12.75 as of 9:34 a.m. Fresenius announced its decision to terminate the deal on Sunday. The company said it was due to Akorn’s failure to “fulfill several closing conditions.” In a statement, Fresenius said there were “material breaches” of data integrity requirements that were supposed to be reported to the U.S. Food and Drug Administration. Those requirements were related to Akorn’s operations, the company said in its announcement. Fresenius said the breaches were discovered during an independent investigation of the company it was acquiring. Akorn was given an opportunity to conduct its own investigation and “present any information it wished Fresenius to consider,” but the company declined to do so, Fresenius said in its statement.
In February Fresenius warned that the deal, initially expected to close in December 2017, was in jeopardy due to concerns over the data breach.
In a statement issued Sunday Akorn said it “categorically disagree with Fresenius’ accusations.” The company said the ongoing investigations are not a condition of closing the deal. Akorn added that the investigations have not discovered any information that “would result in a material adverse effect on Akorn’s business and therefore there is no basis to terminate the transaction.” Akorn added that it intended to fight for its rights and Fresenius’ obligations regarding the acquisition.
This morning Akorn filed a complaint in Delaware Chancery Court asking that Fresenius Kabi AG be required to fulfill its merger obligations. In another statement issued this morning, Akorn again said Fresenius’ claims are without merit.
“The previously disclosed ongoing investigation, of which we have voluntarily notified and are in regular communication with the Food and Drug Administration, has not found any facts that would result in a material adverse effect on Akorn’s business and therefore there is no basis to terminate the transaction. The investigation is not a condition to closing and the only remaining condition is approval from the Federal Trade Commission,” the company said.
When Fresenius initially announced its deal last year the company said Akorn’s diversified portfolio of more than 180 generic, branded, OTC and animal health products would complement its own sterile injectables business. When Fresenius announced the deal last year the company had been hoping the acquisition would provide it a greater toehold in the United States. Despite the collapse of the deal this weekend, Fresenius said it intends for its Kabi subsidiary to expand its existing business in order to reach the planned growth goal in the U.S., CNBC reported.
In addition to announcing the termination of the Akorn deal, Fresenius also announced this weekend that it had sold its stake in Sound Inpatient Physicians Holdings, LLC. for $2.15 billion.
