Novo Holdings has met all regulatory conditions for its $16.5 billion purchase of Catalent, which is expected to close soon. This acquisition aims to increase production of Wegovy, with Novo Nordisk having indicated potential impacts on its operating profit growth. Despite facing opposition, particularly from U.S. consumer advocates, the deal received EU antitrust approval, and negotiations are ongoing regarding regulatory inquiries from the FTC.
Novo Holdings has successfully met all regulatory requirements concerning its $16.5 billion acquisition of Catalent, a U.S.-based contract drug manufacturer. The companies announced on Saturday that they anticipate the finalization of this transaction in the near future. This acquisition, which was agreed upon in February, is aimed at enhancing the production capacity for the highly-regarded weight-loss medication Wegovy, developed by Novo Nordisk, a primary shareholder of Novo Holdings. Additionally, as part of the arrangement, Novo Holdings will divest three of Catalent’s manufacturing facilities located in Italy, Belgium, and the United States to Novo Nordisk for $11 billion.
Novo Nordisk has indicated that the acquisition may negatively affect its operating profit growth by mid-single digits in 2025 and has stated that it does not plan to launch a share buyback program in that year. Earlier in December, the European Commission granted antitrust approval for the deal, stating that it would not pose competition issues in the European Economic Area. Furthermore, there was considerable opposition from various U.S. consumer groups and unions who urged the Federal Trade Commission (FTC) to block the transaction, including a call for investigation from Senator Elizabeth Warren. Although the FTC sought additional information regarding this acquisition in May, there has been no further communication from the agency as of now.
The acquisition of Catalent by Novo Holdings represents a significant move in the pharmaceutical industry, particularly in the realm of weight-loss medications. Wegovy, an injectable GLP-1 drug developed by Novo Nordisk, has gained substantial popularity, necessitating increased production capabilities. By acquiring Catalent, known for its contract manufacturing services, Novo Holdings aims to boost its production capacity. The subsequent sale of Catalent’s manufacturing facilities to Novo Nordisk further underscores the strategic alignment of these transactions within the Novo family, while navigating the regulatory landscape poses both challenges and opportunities.
In summary, Novo Holdings has cleared all regulatory hurdles for its substantial acquisition of Catalent, which is expected to be completed imminently. This strategic move aims to increase production of Wegovy amidst significant competition and scrutiny from regulatory bodies. While the acquisition is positioned to enhance operational capacity, it may have short-term financial impacts on Novo Nordisk as noted in their outlook for 2025. The concerns raised by U.S. consumer groups and politicians about the deal will remain a consideration as the transaction progresses.
Original Source: www.investing.com
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