Trans-Atlantic Takeover

A Healthy Shopping Spree

main 2Reuter Fresenius CEO Stephan Sturm
Fresenius CEO Stephan Sturm knows what he wants. Source: Reuters

Fresenius, Europe’s largest publicly traded medical group, is set to continue its expansion course. The drug maker and operator of hospitals is in talks to buy Akorn, a U.S. producer of medicines valued at $3.7 billion, or €3.5 billion.

The Bad Homburg-based company is the world’s largest provider of dialysis services through its listed subsidiary Fresenius Medical Care. It confirmed Friday evening it was discussing a takeover with Akron’s board, after Bloomberg had reported on the talks. The companies were not certain of a deal, however, both firms said.

In September, Fresenius agreed to buy Spain’s largest private hospital operator, Quirónsalud, for €5.8 billion, marking the first expansion of its hospital operations outside Germany, where Fresenius is the largest publicly listed owner of medical centers. That deal, the company’s biggest ever, was concluded on February 1.

Fresenius, which is valued at €41.4 billion on the Frankfurt stock exchange, has been snapping up businesses for more than a decade. It bought up German clinical group Helios in 2005 and American pharmaceutical company APP three years later. In 2013, Fresenius bought the majority of hospitals owned by rival Rhön-Klinikum in Germany in a €3-billion deal that made it the largest private hospital operator in Europe.

Chief Executive Stephan Sturm, in office since July 1, has continued the strategy of his predecessor Ulf Mark Schneider. Mr. Sturm was previously finance head under Mr. Schneider.

Acquiring Akorn would add $1.1 billion, or €1 billion, in annual revenue to the €29.5 billion Fresenius earned last year. Most of Akorn’s sales are in the United States. Fresenius earned 48 percent of its revenue in North America, the bulk of this in the U.S.

In January, Fresenius and its dialysis subsidiary Fresenius Medical Care saw their shares plunge after the company warned its U.S. business could be hurt by planned regulation changes. In the end, these changes did not take place.

Akron’s shares rose more than 20 percent after the takeover talks became public, while Fresenius’ stock rose 0.8 percent in Frankfurt.

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Gilbert Kreijger is an editor with Handelsblatt Global, covering companies and markets. To contact the author: kreijger@handelsblatt.com

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