E Thermo Fisher Scientific Inc. Acquires Affymetrix In A Deal Valued At $1.3 Billion

On Friday shares of Affymetrix (AFFX) surged by 50% in after-hours trading following Thermo Fisher Scientific's agreement to buy it for $1.3 billion in an all cash deal. Under the terms of the deal Thermo Fisher is to pay $14 a share which is about a 52% premium over the closing share price on Friday at $9.21 per share. 

This deal won't be finalized until the shareholders of Affymetrix approve the deal. The board of directors for both companies have agreed to such a transaction, now all that awaits is the shareholder approval. If all goes well then the transaction is expected to close by the end of the second quarter of 2016. 

The reason for Thermo Fisher acquiring Affymetrix is so that the company can have more access to genetic analysis. Affymetrix has an array of products in its portfolio that help scientists measure genomic features such as DNA, genes, and other molecules. 

This acquisition would be ideal for both companies because each of them would have success as a single entity. Thermo Fisher gets access to new genomic analysis tools, and Affymetrix gets additional reach. This deal will provide Thermo Fisher greater access to sell products on a global scale, and greater commercial viability. This acquisition is a great start to what looks like will be another great year for biotechnology mergers. Big Pharma companies are losing a lot of their products in the pipeline due to patent expirations.

Be on the lookout for other similar biotech deals as 2016 progresses. 

Disclosure: No position in any stocks mentioned.

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