Amersham buys out Pharmacia for £704m

LIFE SCIENCES group Amersham is to buy out Pharmacia's 45% stake in the Amersham Biosciences joint venture for £704m.

Amersham is placing 50m shares to help finance the deal, which will give it full control of Amersham Biosciences and allow it to capitalise on an expanding business.

The transaction would be at least earnings neutral before goodwill amortisation in 2003 and accretive thereafter, the company said in a statement issued in Oslo where it has a secondary listing.

'Prospects for the business are outstanding. The protein separations area is targeting long-term growth in the mid-teens founded on its leadership position in chromatography and its broadening technology base,' said Amersham chief executive Sir William Castell.

Amersham said the contract depended on finalisation of a definitive contract and had no regulatory or other conditions to closing. It also said that full ownership of Amersham Biosciences would facilitate a lower tax rate for the business.

The placement of 50m new shares would represent about 7.8% of its existing share capital and it had granted its brokers an over-allotment option of a further 7.5m shares, the company added.

Pharmaceutical group Pharmacia said that the deal would result in a 'large one-time gain' in the first quarter. Excluding the gain, 'the transaction will not have a material impact on the company's 2002 operating results', it said.