Fresenius Terminates $4.3-billion Merger with AkornBy
Fresenius, a Lake Zurich, Illinois-headquartered specialty and generic pharmaceuticals company, has decided to terminate the company’s $4.3-billion merger agreement with Akorn, a Lake Forest, Illinois-headquartered specialty generic pharmaceutical company, due to Fresenius’ assertion of Akorn’s failure to fulfill several closing conditions.
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 with an expected closing in early 2018.
Fresenius said its decision is 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. Fresenius offered to delay its decision in order to allow Akorn additional opportunity to complete its own investigation and present any information it wished Fresenius to consider, but Akorn declined that offer, according to Fresenius.
Akorn is disputing Fresenius’ termination of the companies’ merger agreement file by filing a complaint in Delaware Chancery Court asking that Fresenius be required to fulfill its obligations under the definitive merger agreement.
“Fresenius’ attempt to terminate the transaction on the pretext that the findings from the ongoing investigation are a breach of the merger agreement is completely without merit,” Akorn said in an April 23, 2018 company statement. “The previously disclosed ongoing investigation, of which we have voluntarily notified and are in regular communication with the Food and Drug Administration, has not found any facts that would result in a material adverse effect on Akorn’s business and therefore there is no basis to terminate the transaction. The investigation is not a condition to closing, and the only remaining condition is approval from the Federal Trade Commission. We intend to vigorously enforce our rights, and Fresenius’ obligations, under our binding merger agreement.”