RP Scherer Acquired By Cardinal Health

20 May 1998

RP Scherer, the US manufacturer of drug delivery systems, is to beacquired by Cardinal Health, one of the major health care service companies in the USA, in a deal valued at approximately $2.4 billion. Scherer, which is based in Troy, Michigan, is the largest producer of soft gelatin capsules in the world.

Under the terms of the agreement, Scherer shareholders will receive 0.95 Cardinal Health shares per each of Scherer common stock. Cardinal will issue approximately 23 million shares in the merger, taking into account outstanding Scherer stock options and related option exercise prices, and is also expected to assume about $159 million in long-term debt.

Cardinal's chief executive Robert Walter said the acquisition will broaden its services to pharmaceutical and biotechnology manufacturers "that is unparalleled in the over $90 billion marketplace today." The company added that the acquisition will not have any effect on its plans to buy Bergen Brunswick Corp, in a $2.8 billion deal which is at present being opposed by the US Federal Trade Commission (Marketletter March 9).

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