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Mergers & Acquisitions

Danaher will acquire GE’s biopharma business

The $21 billion purchase will bulk up the life sciences segment at the US technology firm

by Marc S. Reisch
February 25, 2019

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Credit: General Electric
GE provides supplies and equipment to biologic drug makers.

The technology conglomerate Danaher has agreed to buy General Electric’s biopharma business for $21.4 billion, adding equipment and supplies for biotech drug production to its current stable of offerings for the life sciences industry.

“GE biopharma is renowned for providing best-in-class bioprocessing technologies and solutions,” Danaher CEO Thomas P. Joyce Jr. says. He expects the new business will have $3.2 billion in sales this year.

It will join Danaher’s life sciences segment, which has $6.5 billion in sales from businesses such as Beckman Coulter, a maker of particle characterization and other instruments; the mass spectrometer maker Sciex, and the microscope specialist Leica Microsystems. Danaher added to the segment a year ago when it acquired Integrated DNA Technologies, a custom oligonucleotide maker, at a cost, analysts said at the time, of $1.9 billion.

GE’s biopharma portfolio includes process chromatography hardware and consumables, cell culture media, and single-use bioreactors. The business, like others within Danaher’s life sciences segment, will operate as a stand-alone company.

GE had spent more than a decade building up its bioprocessing portfolio with acquisitions that include the single-use bioreactor expert Wave Biotech in 2007 and the separations technology firm Whatman in 2008.

Its customers include drug companies and academic centers as well as third-party drug ingredient makers such as the Swiss firm Lonza and the Chinese nucleic acid expert RiboBio.

As recently as Jan. 31, when it held a call with financial analysts, GE had planned to spin off its entire health-care business, a $20 billion-a-year operation that includes molecular resonance imaging, radiology consumables, and the business now being sold to Danaher. But the price Danaher is paying—about 17 times GE’s expected 2019 biopharma earnings—allows GE to suspend plans to sell the rest of the health-care operation, says GE CEO H. Lawrence Culp.

GE has struggled with slumping profits in recent years. Culp, who headed Danaher between 2001 and 2014, became GE’s CEO in September following the ouster of his predecessor. GE will retain “full flexibility“ regarding the fate of the remaining health-care business, he says.

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