Genzyme Enters Agreement to Sell Diagnostics Business

Genzyme Corporation (Cambridge, MA, USA) has entered into an asset purchase agreement under which Sekisui Chemical Co., Ltd. (Tokyo, Japan) will acquire Genzyme's Diagnostic products business for US$265 million in cash.

Sekisui will purchase all of the assets of the business, including diagnostic product lines and technologies. Sekisui has agreed to offer employment to the unit's approximately 575 employees upon closing, including senior management, and plans to maintain operations in all of the business's current locations.

Genzyme's Diagnostics business provides critical raw materials and enzymes, clinical chemistry reagents, rapid tests, and infectious disease products to manufacturers, clinical laboratories, distributors, and health care providers. The business is focused on the cardiovascular, diabetes, renal, and infectious disease areas, and is a leading provider of high density lipoprotein (HDL) and low density lipoprotein (LDL) cholesterol tests. The business's 2009 revenue was $167 million.

Completion of the acquisition is subject to certain conditions, including entering into related license, transition services, supply agreements, and other customary closing conditions. The companies aim to close the transaction by the end of the year 2010.

In May 2010, Genzyme announced that it would seek strategic alternatives for three business units as part of a five-part plan to increase shareholder value. In September 2010, Genzyme announced the sale of Genzyme Genetics to Laboratory Corporation of America, and the company plans to divest its Pharmaceuticals business unit. Proceeds from these transactions may be used to finance the second half of the company's $2 billion stock repurchase.

The business will be operated as part of Sekisui Medical Co., Ltd., which is a division of Sekisui Chemical. Sekisui Medical is seeking to expand its global presence--it has four businesses, which focus on diagnostic reagents, medical devices, pharmaceuticals and fine chemicals, and toxicology research.

In the United States., Sekisui America Corporation (a 100%-owned subsidiary of Sekisui Chemical) will establish a new subsidiary in Framingham (MA, US), and the newly established company will acquire the assets possessed by Genzyme's Diagnostics Business in North America (including the shares of the Canadian subsidiary). In Europe, Sekisui Europe BV (a 100%-owned subsidiary of Sekisui Chemical) will similarly establish a new subsidiary in West Malling (UK) and the newly established company will acquire the assets possessed by Genzyme's Diagnostics Business in the UK, while at the same time Sekisui Europe BV will acquire the shares of the subsidiary in Germany.

Related Links:
Genzyme Corporation
Sekisui Chemical Co., Ltd.
Laboratory Corporation of America