Charles River to Buy China''s WuXi for $1.6 Billion
April 26, 2010
U.S.-based pharmaceutical research firm Charles River Laboratories, has agreed to buy Wuxi PharmaTech, a Chinese rival, for US$1.6 billion. The deal would allow Charles River to expand its presence in China and gain greater access to the country’s large supply of scientists and cheap R&D facilities. While global pharmaceutical companies have long outsourced less proprietary work such as preclinical testing, clinical trials and manufacturing to third parties such as Charles River and WuXi, increasingly they are asking outsiders to be involved in the drug discovery process. Western contract researchers, meanwhile, are moving their facilities to places like China and India, where costs are much lower and scientists are much easier to find. Under the deal Charles River, advised by JPMorgan, will pay Wuxi, advised by Credit Suisse, $21.25 a share in cash and stock. The company will retain the name Charles River and Wuxi will be delisted. The transaction is among the top three foreign takeovers of a Chinese company and the largest in the pharmaceutical industry, according to Dealogic.