Fresenius (ETR:FRE) is walking away from a $4.3 billion merger with U.S. generic drugmaker, Akorn Inc. (NSDQ:AKRX), citing an investigation that found material breaches of FDA data integrity requirements relating to Akorn’s operations.
Fresenius said in a statement that it offered to delay its decision to give Akorn time to compete its own investigation, but Akorn turned the offer down.
In its own prepared remarks, Akorn countered Fresenius’ claims that the drugmaker failed to fulfill closing terms, arguing that the issues being probed weren’t a condition to closing.
“We intend to vigorously enforce our rights, and Fresenius’s obligations, under our binding merger agreement,” the company said.
Since Fresenius’ chief executive, Stephan Sturm, took over the company’s corner office in June last year, he has made takeovers a key part of his strategy. Fresenius also bought a Spanish hospital chain for 5.8 billion euros in September of 2016.
The company’s Akorn merger was an attempt to move into new dosage forms and therapeutic areas for its Kabi unit, which develops generic infusion drugs and blood transfusion supplies. Akorn’s portfolio includes ophthalmic drugs, ear drops, nasal sprays, respiratory drugs and medical creams.
Following the news that Fresenius intends to abandon its deal with Akorn, the drugmaker filed a complaint with the Delaware Chancery Court, demanding that Fresenius be required to follow through with the agreement.
“Fresenius’ attempt to terminate the transaction on the pretext that the findings from the ongoing investigation are a breach of the merger agreement is completely without merit. The previously disclosed ongoing investigation, of which we have voluntarily notified and are in regular communication with the Food and Drug Administration, has not found any facts that would result in a material adverse effect on Akorn’s business and therefore there is no basis to terminate the transaction,” the company said.
