Japan's Asahi Kasei to buy Zoll of U.S. for $2.2 billion

Mon Mar 12, 2012 11:27am EDT
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By Yuka Obayashi

TOKYO (Reuters) - Japan's Asahi Kasei Corp will buy U.S. medical equipment maker Zoll Medical Corp for $2.21 billion as it looks to build a global healthcare business and reduce reliance on its chemicals and fibers operations.

Asahi Kasei, which is seeking to expand its presence in the United States, will buy Zoll in an agreed cash deal for $93 a share, a 24 percent premium to Zoll's closing price on Friday, the companies said in a joint statement on Monday. The deal is Asahi Kasei's biggest acquisition by far.

Zoll shares were up 23.64 percent at $92.86 in early trading.

" I think the probability of another bidder coming in is fairly low," said Deepak Chaulagai, an analyst at Dougherty & Co. While it would not be impossible for a company such as St. Jude Medical Inc to come in, it is unlikely, he said.

"This is a good deal," he said, "Asahi will let Zoll run as a wholly owned subsidiary, so from that perspective it looks like a win-win for both companies."

The transaction, which adds to about $200 billion that Japanese firms have spent on overseas acquisitions in the past four years, is expected to close in the second quarter, the companies said. Asahi Kasei said it will finance the deal with loans.

Asahi Kasei derives more than half its sales from its chemicals and fibers businesses and almost a third from homes and construction materials. Combined, those businesses generate close to 90 percent of operating income.

Healthcare makes up just 7 percent of sales and 8 percent of operating income, but President Taketsugu Fujiwara said the 80-year-old company had identified the sector as a growth area.   Continued...