Johnson & Johnson
The health-care conglomerate already owns about 18% of Crucell through an equity investment and drug development deal. If the full buyout goes through -- there are still details to be worked out -- the purchase price could be in the $2.3 billion range.
That's a fairly large purchase for Johnson & Johnson, but I like the addition of vaccines to the conglomerate's mix of offerings. Once a vaccine becomes an established player in doctors' medical bags, it's really hard to unseat it. One of the best products to come out of Pfizer's
Except for garnering a piece of the arbitrage money, it might be a little late to jump into Crucell; I doubt you'll see another company start a bidding war with Johnson & Johnson. Being a major shareholder in Crucell, J&J is well-positioned to know the true value of the company, and some drugmakers might be off the table from bidding anyway. Crucell developed childhood vaccine Quinvaxem with Novartis
Plus it's not like pharmaceutical companies have been itching to pick up vaccine assets. Abbott Labs
That might be a sign that Johnson & Johnson is overpaying, but like investors in Berkshire, Johnson & Johnson's investors will just have to trust that management can deploy capital in a successful manner.
James Early has more on Johnson & Johnson, as it is today's "11 O'Clock Stock" buy opportunity.
Berkshire Hathaway and Pfizer are Motley Fool Inside Value choices. Berkshire Hathaway is a Motley Fool Stock Advisor recommendation. Novartis is a Motley Fool Global Gains pick. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor selection.
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