Vectura to merge with Skyepharma in £441m deal


Two of the UK's biggest names in inhalation delivery technologies are set to merge following Vectura's acquisition of competitor Skyepharma.

The deal is thought to be worth around £441 million at around 410p per Skyepharma share, giving a £10 million saving per year by 2018 through cutting duplicated roles.

The merger will result in Skyepharma's investors owning around 42% of the overall company. Skyepharma shareholders will receive 2.79 new Vectura shares for every one they own. They also have the option to take 15% of the overall offer in cash (a maximum of £70 million) instead.

Both Skyepharma's top investor, HBM Healthcare Investments (which owns around 28.5% of Skyepharma), and top-six and top-10 investor in both companies, Aviva, have backed the deal, which brings the value of the newly-established company to around £1 billion.

Chairman of Skyepharma, Frank Condella, said: "Together, we believe the combined expertise of Skyepharma and Vectura and our strong array of partners will create an industry-leading player, increasing our ability to help patients suffering from respiratory diseases worldwide and to deliver even more attractive returns to shareholders."

Trevor Green, fund manager at Aviva Investments, commented that the new merger "will lead to a global leader with a wider suite of products".

Skyepharma recently reported record revenues, achieving around £96 million in 2015, up almost a third on 2014, in part the result of the first royalty payments from its flutiform asthma inhaler.
2015 saw several pharma mergers, including smaller deals such as Shire's $5.2billion NPS Pharma deal and Teva's $40 billion Allergan acquisitions, along with the $150 billion mega-merger between Pfizer and Allergan that led to the formation of the world's biggest pharma company.

Vectura's CEO James Ward-Lilley is set to retain his current role in the combined company with Skyepharma's Peter Grant making way.

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Linda Banks