Johnson & Johnson (JNJ), Actelion (ALIOY) Deal Said Valued at $250-$260 Per Share, Including SpinCo - Sources

January 12, 2017 12:38 PM EST

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Johnson & Johnson (NYSE: JNJ) and Actelion (OTC: ALIOY) are making progress toward finalizing 2017's first mega-deal, valued in the tens of billions of dollars, according to people claiming to have knowledge of the matter.

Under the arrangement being discussed, Actelion would split into two parts, with mature assets acquired by Johnson & Johnson, and the other assets held in a second public company. The amount of the cash component remains an open question but the total deal value is believed to be $250 to $260 per share, including the SpinCo. One person said Actelion investors would likely have the option to take all cash or shares in the new company.

Actelion and Johnson & Johnson in December announced that they entered exclusive talks, an arrangement that excluded Sanofi (NYSE: SNY), a drug company that had also shown interest in a deal with Actelion. While Sanofi is no longer involved in talks, the fact that there was a second bidder stirred rumors that Johnson & Johnson had sweetened its offer by a large sum, but the deal's structure may have played as large of a role as price and been the critical factor in allowing the process to move forward. Actelion's CEO Jean-Paul Clozel, a large shareholder, had pressed for the company's independence from the beginning.

While the terms of the new, complex arrangement may not include a major bump in price, it was described as a win for all parties involved -- Johnson & Johnson, Actelion, and shareholders.

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