Grifols to buy Talecris for $3.4bn

Grifols SA, Europe's largest maker of blood-plasma products has agreed to buy US biotherapeutics company Talecris for approximately $3.4bn in cash and stock to expand its share to almost a third of the US market.

Under the deal, Grifols will pay $19 in cash and 0.641 shares of Grifols for each of Talecris' shares. The price represents a 533 per cent premium to the average closing price of Talecris common stock over the last 30 days. The total offer, including net debt, is approximately $4bn.

The acquisition will add to Grifols' earnings in the first year, with a 'meaningful' boost beginning in the second year, a company statement announced yesterday.

The deal gives Grifols the same share of the $7bn US market for blood-based infusions as Baxter International and more than CSL's 29 per cent share, according to analysts.

In 2008, Australia's CSL entered into an agreement to buy Talecris in an all-cash deal valued at $3.1bn. However the companies cancelled the merger after the US Federal Trade Commission (FTC) failed to approve the deal based on anti-trust grounds.

Victor Grifols, CEO of Grifols, said he didn't foresee any problems with regulators this time round: "This operation is very different from the previous one," he said.

"Grifols is a much smaller competitor than CSL in the US and we don't see any conflict that may leave the FTC uncomfortable about the combination of the two companies."

Talecris recorded a 12 per cent rise in sales last year, reaching $1.53bn, while the company's profit more than doubled to $153.9m. Grifols said the combined company will have annual revenue of about $2.8bn.

The transaction is expected to close in the second half of 2010.