French pharmaceutical giant Sanofi said it agreed to pay $2.5 billion in cash for California-based biotechnology firm Synthorx. Shareholders of Synthorx will receive $68 per share they own, a 172% premium closing price on December 6.
The parties expect the deal to close in first quarter of next year. Sanofi will merge with Synthorx following closure.
As part of the agreement, Sanofi plans to fund the acquisition with cash on hand. The deal is subject to customary closing conditions.
“This acquisition fits perfectly with our strategy to build a portfolio of high-quality assets and to lead with innovation,” Sanofi CEO Paul Hudson said.
Last year, Synthorx posted a net loss of $56.6 million, but this might change under French giant’s helm. Hudson already hinted that significant changes are underway.
Under Hudson, Sanofi is in the process of conducting a broad strategy review. The executive will reveal the business focus on investor day on December 10.
Previously, Reuters reported citing sources that the French company is weighing in options for its consumer healthcare unit. These include a joint venture or an outright sale. Additionally, an internal memo seen by Reuters shows that Muzammil Mansuri, Sanofi’s senior strategy executive vice president, will leave the company.
In connection with the transaction, Sanofi was advised by Morgan Stanley on the financial matters, while Weil, Gotshal & Manges served as legal counsel. In addition, Centerview Partners acted as financial adviser to Synthorx Sanofi and Cooley provided legal advice.
Sanofi shares were down 0.9% at 82.80 euros apiece on Monday.