By Senad Karaahmetovic
Amgen (NASDAQ:AMGN) has agreed to acquire Horizon Therapeutics (NASDAQ:HZNP), according to Bloomberg News. Amgen agreed to pay $116.5 for each HZNP share, valuing the deal at about $26 billion.
If completed, Horizon would become Amgen’s largest-ever acquisition. The deal could be announced as soon as this week, although the talks could still fall apart, according to Bloomberg.
The Wall Street Journal reported first that Amgen is in advanced talks to buy Horizon for “well over $20 billion.”
Horizon accepted the bid from Amgen after French giant Sanofi SA (EPA:SASY) said it won’t proceed with an offer due to a high price. Johnson & Johnson (NYSE:JNJ) also pulled out from the race earlier this month.
Amgen’s $116.5 per share bid for Horizon represents a 20% premium to the firm’s closing price on Friday. Horizon shares soared over 27% on November 29 on the report that several large companies are discussing a takeover deal. The agreed price represents a 48% premium relative to HZNP’s closing price on November 28.
For Mizuho analysts, the takeover makes “strategic sense” due to two key reasons. First, Amgen’s Otezla and Enbrel are facing competition from Sotyktu and HZNP's portfolio “could help fill that gap as a growth driver for AMGN.”
Second, they argue, that an HZNP takeover “could potentially help Amgen manage its tax burden going forward."
“In 2014 HZNP acquired Vidara Therapeutics International, which moved Horizon to Ireland and reduced its tax bill substantially. AMGN is facing potentially higher taxes due to ongoing issues with its Puerto Rico facility and a deal with HZNP could perhaps help to mitigate this issue, in our view,” the analysts added.
Oppenheimer analysts added that the two companies have a complementary autoimmune pipeline. On the valuation, the analysts said earlier that the reasonable price for HZNP would be around $120 per share.
HZNP stock is up 14% to $111.00 per share in pre-open Monday while Amgen shares are down 0.8%.