Johnson & Johnson (NYSE:JNJ) declined to overpay for Actelion takeover

According to the latest reports Pharmaceutical giant Johnson & Johnson (NYSE:JNJ) withdraws its interest to takeover Swiss Drug Company Actelion Pharmaceuticals Ltd. citing the higher than expected  price tag.

Johnson & Johnson (NYSE:JNJ) said in a statement that it had terminated talks after the companies confirmed J&J’s approach last month.

Meanwhile, Actelion said in a separate statement that it is “engaged in discussions with another party regarding a possible strategic transaction.”



However the price tag discussed between both sides were not disclosed and kept confidential, but analysts were expecting the deal to close around $30 billion. Actelion presently has a market value just above $22 billion after its shares surged on prospects of a takeover.

With that, a deal would have surpassed J&J’s largest to date, the $21 billion purchase of trauma-device maker Synthes Inc. in 2011.

New Brunswick, N.J.-based Johnson & Johnson (NYSE:JNJ) said that the price was too high to make the kind of return the health-products company expects on a transaction.

“Johnson & Johnson was not able to reach an agreement that it believed would create adequate value for its shareholders,” the company said in its statement.

Meanwhile J&J had been chasing Actelion because its range of rare-disease medications would have helped the health-products giant overcome low-priced rivalry for its top-selling drug Remicade. Actelion has a domain in the treatment of pulmonary arterial hypertension.

Actelion posted revenue of 2.05 billion Swiss francs ($2.03 billion) and a profit of 551.9 million francs in 2015. With a market value of more than $300 billion and about $40 billion in cash, Johnson & Johnson had the fiscal firepower to do a deal but company’s Chief Executive Alex Gorsky and Chief Financial Officer Dominic Caruso have reportedly declined to pay extra for purchase.

Furthermore In the past Johnson & Johnson (NYSE:JNJ) also failed to attain Pharmacyclics, a cancer-drug company that was later on bought by AbbVie Inc. for reported $21 billion.

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