Charles River, WuXi mutually terminate $1.6-billion merger
30 Jul 2010
Charles River Laboratories International, a US-based medical research equipment and services company and China's WuXi PharmaTech Inc, yesterday agreed to mutually terminate their proposed $1.6 billion merger following objections from Charles River shareholders.
"Given their concerns about the proposed transaction, and our commitment not to proceed without their support, we have decided that terminating the transaction is the appropriate action to take," said James Foster, chairman of Charles River in a statement.
On April 2010, Wilmington, Massachusetts-based Charles River had proposed to buy WuXi PharmaTech, a leading drug research and development outsourcing company with expertise in discovery chemistry and with operations in China and the US for about $1.6 billion. (See: Charles River to buy China's WuXi PharmaTech for $1.6 billion)
The deal would have given Charles River an integrated portfolio of products and services, at different locations, such as North America, Europe and China and drug-testing facilities in Shanghai, Suzhou and Tianjin.
It also expected to achieve pre-tax cost savings and synergies of approximately $20 million on an annualised basis, beginning in 2011.
After announcing the proposed acquisition, Charles River revised its synergy figures at an investor relations presentation and said that the merger would provide about $75 million to $100 million in revenue synergies on an annual basis by 2013.