Centene to acquire Magellan Health in $2.2bn deal

BY Richard Summerfield

Healthcare insurer Centene Corp has agreed to acquire Magellan Health Inc in a $2.2bn deal, including debt, which will expand Centene’s reach in the mental health space.

Under the terms of the deal, Centene will pay $95 per share in cash for the company, a 14.7 percent premium to Magellan’s closing price last Thursday. The purchase will be primarily funded with debt, and JPMorgan Chase & Co. has provided a bridge financing commitment.

The deal for Magellan, which provides mental health services to patients with serious mental illness, autism and opioid and substance use, is expected to close in the second half of 2021.

Ken Fasola, chief executive of Magellan, will remain with the company, which will continue to operate independently within Centene after the transaction, the companies said in a statement.

“There is a critical need for a fundamentally better approach to supporting people with complex, chronic conditions through better integration of physical and mental health care,” said Michael F. Neidorff, chairman, president and chief executive of Centene. “This has become even more evident in light of the pandemic which has driven a dramatic rise in behavioral health needs.

“This acquisition accelerates our diversification strategy and enhances our ability to build next generation capabilities in our specialty care business by leveraging our scale and investments in technology,” he continued. “Furthermore, we are very familiar with the range of Magellan Health’s healthcare solutions as we have been one of their customers over many years, and our shared commitment to taking care of the most vulnerable populations makes this transaction a natural step.”

“We’re thrilled to bring together two businesses with complementary capabilities and a shared commitment to driving higher quality care for our members while lowering overall healthcare costs,” said Mr Fasola. “By joining Centene under the Health Care Enterprises umbrella, we will maintain the independence necessary to ensure continued service to our third-party customers while accelerating the introduction of innovative solutions and reimagining behavioral health.”

He added: “I look forward to continuing to lead Magellan Health as we create exciting new opportunities for our customers and employees who will benefit from the creation of a best-in-class platform that meets our members' needs today and in the future.”

News: Insurer Centene to buy Magellan in $2.2 billion mental health push

Angelini acquires Arvelle in $1bn pharma deal

BY Fraser Tennant

In a $1bn deal which makes it one of the main players in the treatment of central nervous system (CNS) and mental health disorders, international pharmaceutical company Angelini Pharma has acquired Swiss biopharmaceutical firm Arvelle Therapeutics.

Following the acquisition of Arvelle Therapeutics by Angelini Pharma, the latter will become the exclusive licensee for the marketing of cenobamate – a medication used for the treatment of partial-onset seizures in adults and sold under the brand name Xcopri – in the European Union (EU) and in other countries of the European Economic Area (EEA).

Angelini Pharma plans to launch cenobamate after receiving approval from the European Medicines Agency (EMA), scheduled for later in 2021.

“I am very proud of the progress we have made over the past two years in making cenobamate available to people with epilepsy in Europe,” said Mark Altmeyer, president and chief executive of Arvelle Therapeutics. "We believe that there is an excellent strategic affinity with Angelini Pharma, and we believe that the acquisition of Arvelle and the launch of cenobamate can help accelerate their goal, that of becoming protagonists in the CNS disease sector."

Operating directly in 15 countries and employing almost 3000 people, Angelina Pharma markets its products in over 50 countries through strategic alliances with the most important international pharmaceutical groups.

“We are thrilled with this promising agreement, as well as with the commitment and work that our colleagues at Arvelle have invested in their company over the last few years,” said Pierluigi Antonelli, chief executive of Angelini Pharma. “We share the same patient-centred culture and the same ambition to be agile.

Following the acquisition, Angelini Pharma expects to see direct affiliates opened in France, the UK, Nordic countries and Switzerland by 2022.

“This agreement will push us to become a major player in Europe,” added Mr Antonelli. “We will be able to meet the needs of patients with various CNS disorders, thanks to an innovative portfolio, excellent medical skills and a wide commercial presence.”

News: Italy's healthcare group Angelini buys Swiss-based Arvelle in $1 billion deal

Diamondback acquires QEP in $2.2bn energy deal

BY Fraser Tennant

Strengthening its position in the Midland Basin of West Texas, independent crude oil and natural gas exploration and production company Diamondback Energy is to acquire rival QEP Resources in an all-stock transaction valued at approximately $2.2bn, including QEP’s net debt of $1.6bn.

Under the terms of the definitive agreement, stockholders of QEP will receive 0.05 shares of Diamondback common stock in exchange for each share of QEP common stock, representing an implied value to each QEP stockholder of $2.29 per share based on the closing price of Diamondback common stock on 18 December 2020.

Furthermore, upon closing the transaction, Diamondback stockholders will own approximately 92.8 percent of the combined company, and QEP stockholders approximately 7.2 percent.

“The acquisition of QEP also checks every box of Diamondback’s corporate development strategy,” said  Travis Stice, chief executive of Diamondback. “The business combination with QEP is accretive on all relevant 2021 financial metrics including free cash flow per share, cash flow per share and leverage, even before accounting for synergies. Most importantly, the addition of this Tier-1 resource competes for capital right away in Diamondback’s current portfolio.”

Upon closing, Diamondback’s board of directors and executive team will remain unchanged and the company will continue to be headquartered in Midland, Texas.

“We believe that this strategic merger with Diamondback provides our shareholders with an exciting investment opportunity, now and in the future,” said Tim Cutt, president and chief executive of QEP. “The large contiguous Tier-1 acreage position in the Northern Midland Basin is expected to lead to operational synergies and deliver capital efficiencies beyond what each company could achieve independently.”

The transaction has been unanimously approved by the boards of directors of Diamondback and QEP and is expected to be completed in the first quarter or early in the second quarter of 2021, subject to the approval of QEP stockholders, the satisfaction of certain regulatory approvals and other customary closing conditions.

Mr Cutt concluded: “I believe in this combination and look forward to being a long term shareholder and watching the value of the company grow with time.”

News: Diamondback to buy shale rival QEP in $2.2 billion deal

Huntington Bancshares to acquire TCF Financial in $6bn deal

BY Richard Summerfield

Huntington Bancshares Inc has agreed to buy TCF Financial Corp for $6bn in stock. The merger will create a company worth about $22bn in market value, the companies said in a statement.

The deal is expected to complete in the second quarter of 2021, subject to customary closing conditions, including regulatory and shareholder approvals. The combined company will have about $168bn in assets, $117bn in loans and $134bn in deposits. Huntington expects the transaction to be 18 percent accretive to earnings per share in 2022.

Stephen Steinour, chief executive of Huntington, will become chairman, president and chief executive of the combined holding company. Gary Torgow, chairman of TCF Financial Corp, will serve as chairman of the combined banks’ board of directors.

“This merger combines the best of both companies and provides the scale and resources to drive increased long-term shareholder value,” said Mr Steinour. “Huntington is focused on accelerating digital investments to further enhance our award-winning people-first, digitally powered customer experience. We look forward to welcoming the TCF Team Members. Together we will have a stronger company better able to support our customers and drive economic growth in the communities we serve.”

“This partnership will provide us the opportunity for deeper investments in our communities, more jobs in Detroit, an increased commitment in Minneapolis and a better experience for our customers,” said Mr Torgow. “We will be a top regional bank, with the scale to compete and the passion to serve. Merging with the Huntington platform will be a great benefit to all of our stakeholders and will drive significant opportunities for our team members.”

The Huntington/TCF transaction is one of a number of deals announced recently by regional US lenders, many of which have been moved to agree mergers in light of softer financial regulations and lower corporate taxes introduced by the Trump administration. In November, Spain’s BBVA sold its US business to PNC Financial Services Group Inc for $11.6bn in cash in one of the most eye-catching deals.

News: Huntington buys TCF for $6 billion in U.S. regional bank merger wave

AstraZeneca acquires Alexion in $39bn mega-merger

BY Fraser Tennant

In one of the year’s largest drug mergers, multinational pharmaceutical and biopharmaceutical company AstraZeneca is to acquire US biopharmaceutical company Alexion Pharmaceuticals, Inc. in a transaction valued at $39bn.

Under the terms of the definitive agreement, Alexion shareholders will receive $60 in cash and 2.1243 AstraZeneca American Depositary Shares (ADSs). The deal is expected to achieve double-digit revenue growth through 2025.

"Alexion has established itself as a leader in complement biology, bringing life-changing benefits to patients with rare diseases,” said Pascal Soriot, chief executive of AstraZeneca. “This acquisition allows us to enhance our presence in immunology. We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines for more patients."

The combined company will have an enhanced global footprint and broad coverage across primary, speciality and highly specialised care.

“For nearly 30 years Alexion has worked to develop and deliver transformative medicines to patients around the world with rare and devastating diseases,” said Ludwig Hantson, chief executive of Alexion. “I am incredibly proud of what our organisation has accomplished and am grateful to our employees for their contributions. This transaction marks the start of an exciting new chapter for Alexion. We bring to AstraZeneca a strong portfolio, innovative rare disease pipeline, a talented global workforce and strong manufacturing capabilities in biologics.”

Furthermore, the capabilities of both organisations will create a company with great strengths across a range of technology platforms, with the ability to bring innovative medicines to millions of people worldwide.

The boards of directors of both companies have unanimously approved the acquisition, which is subject to receipt of regulatory clearances and approval by shareholders of both companies. The transaction is expected to close in Q3 2021.

Mr Hantson concluded: “We remain committed to continuing to serve the patients who rely on our medicines and firmly believe the combined organisation will be well positioned to accelerate innovation and deliver enhanced value for our shareholders, patients and the rare disease communities.”

News: AstraZeneca to acquire Alexion in $39 bln deal