Health care M&A activity hits record level

April 24, 2014: 12:39 PM ET

It's been a huge week for health care M&A, putting 2014 on a record pace.

FORTUNE -- The year-to-date level of announced M&A activity in the health care sector is at its highest level since Thomson Reuters (TRI) began tracking such deals in 1980, hitting $153.5 billion. Approximately 71% of that volume is in the pharmaceutical sector, followed by health care equipment and technology.


Source: Thomson Reuters

If this isn't something you really saw coming, that's probably because around $88.1 billion of that $153.5 billion came just this week. Namely from four transactions:

  • Zimmer Holdings Inc. (ZMH) today agreed to acquire Biomet Inc., a Warsaw, Ind.-based maker of medical devices like dental implants and artificial hips joints. The deal is valued at approximately $13.35 billion, including the assumption of net debt. Biomet was taken private for $11.4 billion in 2007 by The Blackstone Group, GS Capital Partners, KKR and TPG Capital. It had been expected to file for an IPO.
  • Novartis (NVS) agreed to acquire the oncology drug business of GlaxoSmithKline (GSK) for upwards of $16 billion, while selling its vaccine business to GSK for $7.1 billion. The two companies also will combine their consumer drug businesses.
  • Novartis also agreed to sell its animal health business to Eli Lilly (LLY) for $5.4 billion.
  • Valeant Pharmaceuticals International Inc. (VRX) offered to acquire Botox maker Allergan Inc. (AGN) for approximately $50 billion in cash and stock. The offer is worth approximately $152.88 per Allergan share (including $48.30 in cash), which represents a 31% premium to Allegan's price before Bill Ackman's Pershing Square Capital Management revealed on April 10 that it had acquired more than a 5% interest in the company. Pershing Square now holds around a 9.7% stake in Allergan, and is partnering with Valeant on the takeover bid. It is worth noting that Allergan has not yet accepted or rejected the offer.

Goldman Sachs (GS) is the year's top advisor so far on health care M&A, having worked on the Allergan, Novartis Animal Health and Biomet transactions.

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