The drug industry's biggest hostile takeover attempt in history turned friendly when American Home Products Corp. tossed in an extra dollar for each share of American Cyanamid Co.
The sweetened offer, announced Wednesday, allowed American Home to sign a deal to buy Cyanamid for $9.7 billion, or $101 per share.The merger was cemented two weeks after American Home made an unsolicited $95 per share bid and two days after it upped the offer to $100 to keep out any other would-be suitors.
It will create a drug, food and agricultural chemicals concern with more than $12 billion a year in sales.
Included are American Home's flagship brands, the painkillers Advil and Anacin, its Chef Boyardee, Gulden's mustard, Jiffy Pop and other food brands, along with Cyanamid's Centrum vitamins, surgical devices, vaccines, and a variety of insecticides and herbicides.
Under the terms, American Home will pay about $600 million above its initial bid. The price also is about a 60 percent premium over Cyanamid's share price before that initial offer.
The deal is the one of biggest ever in the health-care industry, as companies have tried to grow larger to protect profits in an era of reform and cost cutting. The only one bigger was the purchase of Squibb by Bristol Myers Co. for $11.5 billion in 1989.
Analysts continued to applaud the deal Thursday even though it will require up to $9 billion in debt to finance.