Novartis set to acquire Chiron

Novartis has been granted US regulatory approval by the US Federal Trade Commission (FTC) to acquire the 58% stake in the Chiron Corporation, a US biotech company headquartered in Emeryville, California, that it does not own.

The approval comes following the US FTC's early termination of the 30-day waiting period under the Hart-Scott-Rodino Act, an antitrust regulation requiring any investor seeking to acquire a stake valued at more than 15% or $15m of another company to undertake US federal government review.

The Swiss company, headquartered in Basel, says that it expects to complete the acquisition in the first half of 2006, subject to approval by a majority of Chiron's shareholders and other customary closing conditions, including additional regulatory approvals. Following discussions with it independent directors, Chiron's Board of Directors is reported to have recommended that shareholders accept an offer of US$45.00 cash per share from Novartis for the remaining 113 million shares, which amounts to around US$5.1bn. Chiron is therefore also expecting the transaction to be completed in the first half of 2006.

Dr. Daniel Vasella, chairman and ceo of Novartis, said of the deal: 'Novartis brings the necessary expertise, scale and resources needed to address the vaccine production issues at Chiron and to strengthen r&d efforts aimed at bringing novel vaccines to patients.'

Novartis has also extended its licensing agreement with US biotechnology company Xenogen that will see it continue to licence Xenogen's proprietary Living Image software and patented methods of biophotonic imaging, designed for use with Xenogen's biophotonic IVIS imaging systems, for up to two more years. The technology will be used for research in several therapeutic areas at Novartis' research sites in the US, Japan and Switzerland.