Sanofi SA announced it has purchased U.S.-based Principia Biopharma Inc for $3.7 billion marking the French drugmaker’s latest acquisition in the U.S. biotech sector.
Sanofi is set to buy the outstanding shares of Principia for $100 per share in cash, representing an aggregate equity value of around $3.68 billion on a fully diluted basis and a premium of 10% to Principia Biopharma’s closing price of $90.74 on Aug. 14.
The deal will strengthen Sanofi’s research capabilities in areas such as autoimmune and allergic diseases, the companies said. The merger also seals a record summer for European takeovers of U.S. healthcare targets, coming just two weeks after Germany’s Siemens Healthineers made a $16.4 billion swoop on U.S. oncology firm Varian.
“This acquisition advances our ongoing R&D transformation to accelerate development of the most promising medicines that will address significant patient needs,” said Sanofi Chief Executive Paul Hudson.
Its shares edged up 0.5% in mid-session trading, outpacing a slight rise in France’s CAC-40 index as analysts were positive on the Principia Biopharma deal.
“We like the relatively low risk value accretion of this deal with longer-term optionality, that fits within the strategy of deploying firepower across numerous bolt-on deals,”.
Sanofi said it expected to complete the acquisition of the U.S. firm, which is developing treatments for multiple sclerosis among other projects, in the fourth quarter of 2020.
“The merger will provide global resources to get these novel therapies to patients faster,” said Martin Babler, president and chief executive at Principia Biopharma.