LONZA TO BUY ARCH CHEMICALS

Abstract

TO HELP SHIFT its business away from the volatile active pharmaceutical ingredient (API) area, Lonza plans to acquire Arch Chemicals in a $1.4 billion cash deal. Although it will still have a leading position in custom manufacturing, the Swiss company will benefit from a new 15% share of the $10 billion-peryear antimicrobial market. The deal offers a “unique opportunity” and “marks the next step of Lonza building a world-class life science company,” Lonza CEO Stefan Borgas said in a conference call with analysts. The combined company will have about $4.3 billion in annual sales, with 43% in microbial control products, 35% in custom API manufacturing, and 22% in life sciences and nutrition products. Custom manufacturing, especially for biologics, currently accounts for more than half of Lonza’s sales, whereas microbial control is about 14% of sales. Acquiring Arch will help strengthen and balance Lonza’s portfolio in many ways, Borgas said, and Lonza can improve Arch’s ...