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Qiagen to Buy Digene for $1.6B; Merger Links US-Europe Molecular Dx Strategy

NEW YORK (GenomeWeb News) - Qiagen plans to buy molecular diagnostics firm Digene in a cash and stock deal valued at around $1.6 billion, the companies said Sunday.
 
Under the terms of the agreement, Digene shareholders will receive either $61.25 in cash for each share of Digene stock they hold or 3.545 shares of Qiagen's stock.
 
The $61.25 per share offer reflects a 37 percent premium for Digene’s stock, which closed Friday at $44.77.
 
The total consideration will consist of 55 percent cash and 45 percent Qiagen stock.
 
The combined company is expected to have over $800 million in overall revenues in 2008, with $350 million coming from molecular diagnostics.
 
Once the deal is finalized, Digene, based in Gaithersburg, Md., will operate as a subsidiary of Qiagen, which is headquartered in Venlo, the Netherlands. Qiagen's shareholders will own roughly 78 percent of the combined company, while Digene's shareholders will own around 22 percent.
 
Digene's core platform is a human papillomavirus test that screens for high-risk strains of HPV that have been linked to cervical cancer. The test has been approved by the US Food and Drug Administration and has received European CE-mark approval.
 
The deal will give Digene an immediate presence in Europe, which could be a lucrative market for the HPV test, and will strengthen Qiagen's molecular diagnostics assay portfolio.
 
Qiagen CEO Peer Schatz said in a statement that the deal "creates significant value for our shareholders and instantaneous market and technology leadership" in the molecular diagnostics market.
 
By connecting the two companies' virology and oncology molecular diagnostics programs, Schatz said that the deal "provides us with many ways to drive top-line and bottom-line growth, such as access to new channels with existing and new products and combined technology, resources and infrastructure to provide greater operating strengths."
 
Schatz also said Qiagen does not expect any layoffs as a result of the merger.
 
Digene shares were up 33 percent in mid-morning trading today, at $59.49.

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