Biotech major CSL withdraws from $3.1-billion Talecris takeover

09 June 2009

Australia's CSL Ltd., the world's second largest maker of blood plasma products has withdrawn its $3.1 billion offer of acquiring US rival Talecris Biotherapeutics Holdings Corp, after the deal was blocked by the US Federal Trade Commission (FTC) last month.

Although CSL had said last month that it would ''vigorously oppose'' the US Federal Trade Commission's attempt to block the deal in the US courts, the Melbourne-based company has now changed its mind and said it was not in the best interest of the company in entering into a protracted litigation process with the FTC, with its inherent risks, substantial costs, and lengthy distraction of CSL management and staff from running its businesses.

In August 2008, CSL proposed to acquire smaller US rival Talecris Biotherapeutics Holdings Corp for $3.1 billion, to boost its presence in the fast-growing biopharmaceutical industry. (See: Australian pharma firm CSL buys US rival Talecris for $3.1 billion)

Talecris, which operates 56 plasma collection centers and two manufacturing facilities in the US, is owned by private equity owners, Cerberus Partners and Ampersand Ventures. The acquisition offer was the largest ever made by an Australian healthcare company.

But last month, CSL had its ambitions derailed to become the world's biggest plasma products maker, when the FTC blocked the takeover on anti-trust grounds, as CSL is the second largest producer of plasma products in the US, behind the world leader, the US-based companies, Baxter International, and Octapharma USA and the North Carolina-based Talecris being the third. (See: US FTC blocks CSL's $3.1-billion acquisition of Talecris Biotherapeutics)

The acquisition of Talecris would have made CSL the leader in the$15-billion global market for plasma-derived and recombinant products and since the three companies combined have 83 per cent share of the US market, CSL would then have an advantage in pricing over its other competitors in the US $7.5 billion plasma industry
CSL said in a statement that as part of the agreement, it would pay Talecris a $75 million break fee while the plasma supply contract it had entered with Talecris in connection with the merger agreement will remain in effect.