Treasurer blocks US takeover of Aussie pharma company
A big-money bid for an Australian drugmaker has been rejected by Finance Minister Jim Chalmers after the Foreign Investment Review Board found the deal was not in the national interest.
The sticking point in Mayne Pharma’s $672 million acquisition came after bidder US healthcare giant Cosette threatened to sell or close the Australian company’s factory in Adelaide.
The treasurer said the decision to cancel the deal was fully consistent with FIRB advice that the proposal would be contrary to Australia’s national interests.
“Following wide-ranging consultation, I have received clear advice from the Treasury and FIRB that no conditions can be put in place to adequately reduce national interest risks, particularly the unique risks to the supply of critical medicines,” Dr Chalmers said in a statement on Friday.
“This advice included views from the Department of Health and Aged Care, the Therapeutic Goods Administration and the South Australian Government.”
The decision will be good news for New Jersey-based private equity firm Cosette, which has been trying for months to exit a $7.40-per-share deal struck in February after Mayne’s financial performance worsened and its share price fell below $5.
After the High Court bailout bid failed, Cosette’s latest move ultimately succeeded: closing the profitable Salisbury plant and forcing the FIRB’s hand by threatening to cut 200-odd jobs.
In late October Dr Chalmers told Cosette that his initial view was not to allow the deal on the grounds that jobs and Australia’s independent research and development capabilities would be at risk if it continued to close the factory.
Mayne halted trading shortly after the ASX opened on Friday morning.
The company’s shares fell more than 20 percent to $4.60.
FIRB was initially due to make its final decision on Thursday, but Mayne made a statement to the stock market on the same day, saying the review board had extended the approval deadline until Friday.
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