Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) shares shot up on Monday after it was announced over the weekend that the company would be acquired by AstraZeneca PLC (NASDAQ: AZN). The board of directors for each company has unanimously approved the transaction.
Under the terms of the agreement, Alexion shareholders will receive $60 in cash and 2.1243 AstraZeneca American depositary shares (ADSs). Note that each ADS represents one-half of one ordinary share of AstraZeneca. As a result, this yields an implied value of $39 billion for the total transaction, or $175 per share.
The transaction price offers premiums of 42.7% and 60.9%, compared with the 50-day and 200-day moving averages of $122.66 and $108.75, respectively.
AstraZeneca, along with Alexion’s R&D team, will work to build on Alexion’s pipeline of 11 molecules across more than 20 clinical-development programs across the spectrum of indications, in rare diseases and beyond.
Combining AstraZeneca’s capabilities in precision medicine and Alexion’s expertise in rare-disease development and commercialization will enable the new company to develop a portfolio of medicines addressing the large unmet needs of patients suffering from rare diseases.
The acquisition is expected to deliver robust and sustainable accretion to AstraZeneca’s core earnings from the outset, with double-digit percentage accretion anticipated in the first three years following the completion of the acquisition.
Lastly, the acquisition is expected to close in the third quarter of 2021.
Alexion Pharmacueticals stock traded up about 31% to $159.18 on Monday, in a 52-week range of $72.67 to $159.50. The consensus price target is $145.35.
AstraZeneca stock was down nearly 6%, at $51.20 in a 52-week range of $36.15 to $64.94. The consensus price target is $61.97.