Pharmacia & Upjohn set to acquire Sugen in $650 million stock deal

Pharmacia & Upjohn is to acquire the US biotechnology company Sugen in astock deal valued at approximately $650 million. Under the terms of the agreement, each of approximately 23.5 million shares of Sugen stock will be exchanged for around $31 worth of P&U shares, though the exact exchange ratio will be based on the average price of the latter's shares prior to closing. If the merger agreement is terminated, P&U has the right to purchase up to 19.9% of Sugen's common stock and a fee of $17 million.

AstraZeneca, which holds a 20% stake in Sugen, says that it is in favor of the deal, and will receive P&U shares in return for its equity in the California-based firm. The transaction values AstraZeneca's stake at $94 million, which it says "represents a significant premium" over its original investment.

Deal boosts P&U's oncology portfolio