Nestle to Acquire Aimmune, Food Allergy Drug Maker, for $2.6 Billion

UTC by Benjamin Godfrey · 3 min read
Nestle to Acquire Aimmune, Food Allergy Drug Maker, for $2.6 Billion
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Nestle S.A. has secured a $2.6 billion acquisition deal with Aimmune (AIMT). Starting with Aimmune’s Palforzia, Nestle hope to expand its food allergy portfolio.

Nestle S.A. (SWX: NESN) through Nestle Health Sciences has released a statement affirming it has struck a deal to purchase Aimmune Therapeutics Inc (NASDAQ: AIMT) for about $2.6 billion. Aimmune is a biopharmaceutical company developing and commercializing treatments for potentially life-threatening food allergies.

Aimmune is renowned for developing Palforzia, the first and only FDA-approved treatment to help reduce the frequency and severity of the allergic reaction to peanuts, including anaphylaxis, in children aged 4 through 17. With Aimmune, children who are allergic to peanuts will have no worries as it offers a more preferred solution than avoidance.

Through the partnership, Nestle believes its ‘food allergy portfolio’ will be bolstered and help ‘create a broader spectrum of solutions for children living with food allergies’. According to Nestlé Health Science Chief Executive Officer Greg Behar:

“This transaction brings together Nestlé’s nutritional science leadership with one of the most innovative companies in food allergy treatment, together we will be able to offer a wide range of solutions that can transform the lives of people suffering from food allergies around the world”.

Nestle Health Sciences already have a 25.6% equity stake in Aimmune and the deal will see it take up complete ownership of the company.

Nestle and Aimmune: a Blend for Perfect Therapy

A look at the underlying business model of Nestle and Aimmune gives credence to this acquisition billed to close by Q4 2020. While Aimmune claims it is on a mission to transform the lives of millions of people who live with serious food allergies, Nestle has a medical nutrition portfolio that is focused on Pediatric Care & Food Allergy, among others.

The interest from Nestle has shown that both companies are aligned in mission and scope and through the deal’s flagship product Palforzia, both firms aim to heal the world of any allergic conditions.

Jayson Dallas, MD, President and Chief Executive Officer of Aimmune, said:

“The agreement with Nestlé Health Science recognizes the value created by years of commitment and dedication to our mission by the team at Aimmune. Delivering Palforzia, the world’s first treatment for food allergy, has been a game-changing proposition in the bio-pharmaceutical industry and is transformative for the lives of millions of people living with potentially life-threatening peanut allergy”.

He added:

“This acquisition ensures a level of support for Palforzia and our pipeline that will further enhance their potential for patients around the world living with food allergies”.

Deal’s Financials

As declared, Nestle S.A. owned subsidiary Société des Produits Nestlé S.A. (SPN) will issue a cash tender to acquire all of Aimmunes outstanding shares that are not owned by Nestle S.A. at $34.50 per share. This offer price is noted to represent a 174% premium to Aimmune’s closing share price on August 28, 2020, of $12.60. At this price, the deal comes valued at $2.6 billion. The firm said in the official announcement:

“Following successful completion of the tender offer and satisfaction of the other closing conditions, a wholly owned subsidiary of SPN will merge with Aimmune, with Aimmune as the surviving corporation, and the outstanding shares not tendered in the offer will be converted into the right to receive the same USD34.50 per share consideration”.

The deal is to be financed with cash and the acquisition is expected to contribute to Nestlé’s organic growth in 2021 and subsequently to the company’s cash earnings by 2022/23.

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