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Genzyme to sell diagnostics unit for $265m

Genzyme has announced it has entered into an agreement to sell its diagnostic products business to Sekisui Chemical for $265m in cash

Genzyme has announced it has entered into an agreement to sell its diagnostic products business to Tokyo-based Sekisui Chemical for $265m in cash.

Under the terms of the agreement, Sekisui will purchase the majority of the business assets, which includes diagnostic product lines and technologies. In addition, the Japanese company has offered to employ all of the units existing staff totalling around 575 employees including senior management. Operations will be maintained in all of the existing locations. 

Henri A Termeer, chairman and CEO of Genzyme said: "This sale is part of our strategy to sharpen the company's focus and allocate our resources to key areas for our future growth such as manufacturing, our rare disease business, and our product pipeline."

The sale of Genzyme's diagnostics unit as well as the sale of Genzyme Genetics to Laboratory Corporation of America, and the company's  plans to divest its pharmaceuticals business unit, form part of Genzyme's five-part plan to increase shareholder value. 

Genzyme's diagnostics business unit is focused on the cardiovascular, diabetes, renal, and infectious disease areas, and is a leading provider of HDL and LDL cholesterol tests. In 2009, the business generated revenue of $167m.

Sekisui will operate the newly-aquired diagnostics business as part of Sekisui Medical Co, Ltd. which is a division of Sekisui Chemical. Based in Tokyo, Sekisui Medical is seeking to expand its global presence. Sekisui Medical has four businesses, focussing on diagnostic reagents, medical devices, pharmaceuticals and fine chemicals, and toxicology research.

The deal, which both companies hope to close by the end of the year, is subject to the usual conditions, such as transition services and supply agreements, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

18th November 2010

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