Novartis Loads Up: A long engagement

Chiron Corp. was driven into the arms of Ciba-Geigy in November 1994 at a time when the industry was in the doldrums and suffering the repercussions of the failure of market maker D. Blech & Co., which knocked investor confidence in the sector sideways. At the time, CHIR was profitable, but it also was racking up R&D spending. Ciba-Geigy, which had been on the hunt for acquisitions, was ready to provide a major cash infusion.

The Swiss pharma agreed to acquire up to 49.9% of CHIR in exchange for $1.34 billion in cash, Ciba's diagnostics business, and its 50% interest in their Biocine Co. Ltd. vaccines joint venture in Italy(see BioCentury Extra, Nov. 22, 1994). At the time, Ciba paid a 97% premium at $117 a share. ...