Akorn CEO Retires; Court OKs Terminated Merger with FreseniusBy
Akorn, a Lake Forest, Illinois-headquartered specialty generic pharmaceutical company, has announced it will move forward as an independent company following a decision from the Supreme Court of the State of Delaware to allow Fresenius Kabi AG, a specialty and generic pharmaceuticals company, to terminate the companies’ merger agreement. Along with the ruling, Akorn Chief Executive Officer (CEO) Raj Rai has decided to retire.
Fresenius originally agreed to acquire Akorn for $4.3 billion plus approximately $450 million of net debt, for a total of $4.75 billion in April 2017. Fresenius, however, later moved to terminate the company’s merger agreement, asserting that Akorn failed to fulfill several closing conditions. In an October 1, 2018 decision, Delaware Civil Court Vice Chancellor J. Travis Laster declared that Fresenius fulfilled its contractual obligations with Akorn and could legally exit the merger, which Akorn appealed. Fresenius said its decision to terminate the merger was based on, among other factors, material breaches of US Food and Drug Administration data-integrity requirements relating to Akorn’s operations found during Fresenius’ independent investigation.
With the litigation process concluded, Akorn’s Board of Directors announced that it is engaged in a formal search for a new CEO to lead the company into its next phase. Current CEO Raj Rai has decided to retire and will assist the board to help ensure a smooth transition and remain in his role until the hiring of the new CEO.
“We recognize that this has been an extended period of uncertainty for Akorn’s customers, employees and investors, and the Board is committed to ensuring the company’s stability and long-term growth,” said Board Chairman Alan Weinstein in a December 7, 2018 statement. “While there is work to do, Akorn’s future remains bright thanks to its manufacturing, quality and generics expertise and is not dependent upon a consummated transaction with Fresenius. We thank Raj for his years of service with Akorn and his success in building the company into a leading organization in a highly competitive industry.”