Akzo Nobel said today it was selling its drugs unit Organon Biosciences to Schering-Plough for €11 billion ($14.5 billion).
The company, which will return €1.3 billion from the proceeds to shareholders, closed the deal over the weekend, having announced just last Friday that it intended to float and list 20 to 30 per cent of Organon on March 27th.
The move marks the break-up of one of Europe's last hybrid chemical-pharmaceutical companies and helps bulk up US-based Schering-Plough, whose chief executive Fred Hassan has made no secret of his desire to find acquisitions.
Schering-Plough said the purchase would boost earnings and will finance the deal through a mix of cash, debt and equity.
The price is well above the level of up to €9 billion analysts had expected Akzo to achieve in an initial public offering, and shares in Akzo Nobel soared as much as 19 per cent to their highest in six years.
The deal value represents 14.6 times 2006 earnings before interest, tax, depreciation and amortisation.