Gilead to buy Degussa's Raylo unit

California, USA-based Gilead Sciences says that it has signed a definitive agreement to acquire the Canadian subsidiary Raylo Chemicals and most of its assets from Germany-headquartered, specialty chemicals company Degussa AG. Under the terms of the agreement, which are subject to certain closing conditions, Gilead will pay approximately 115.2 million euros ($148.1 million) to Degussa.

In addition, Gilead has entered into long-term agreements with Degussa for the supply of raw materials and the manufacture of certain active pharmaceutical ingredients for the US enterprise's products. The companies expect the transaction to close in the fourth quarter of this year.

Located in Edmonton, Canada, Raylo Chemicals is currently part of Degussa's Exclusive Synthesis & Catalysts business unit. Raylo's operations encompass custom manufacturing of APIs and advanced intermediates for the pharmaceutical and biopharmaceutical industries. Gilead has worked with Raylo over the course of the last 14 years, during which time the latter has provided both development expertise and commercial product on a large scale for the US firm. Gilead intends to utilize this site primarily for manufacturing development of investigational products, supplying APIs for clinical research programs and contributing to new product launch supplies. Gilead will assist Degussa in transitioning the non-Gilead business to other sites and the Raylo name will remain an asset of Degussa.