New York, Feb 11 – The board of General Electric (NYSE:GE) is convening to review the company’s decision to launch a formal friendly bid to take a 100 percent stake in the Life Technologies Corporation (NASDAQ: LIFE) in a deal worth $10.4 billion, people familiar with this deal said on Wednesday.
Analysts said the deal would help life tech raise funds to resume projects put on hold because of its cash shortage from ABI acquisition, while GE would gain access to the Human Genome Sequencing business and benefit from Operation synergies and tax breaks.
Analysts were quick to see the logic in the planned acquisition, rumored on Feb. 09. At stake for GE and Life Tech will be the dominance of the rapidly growing and consolidating Human Genome Sequencing industry. If GE succeeds in acquiring Life Tech, the resulting company would be the global leader in the industry competing directly against their biggest threat Illumina (NASDAQ:ILMN). Life tech has sales of more than 3.3 billion last year and a presence in 160 countries. Last month it reported the launch of SOLiD 4 next-generation sequencing system, the industry’s most advanced, most cost effective and highest quality machine. Lift tech had a 11% organic growth last quarter and announced a 100 million investment to address the challenge of bioinformatics generated by whole genome sequencing. “with the product portfolio and solid progresses they made in Biotech and (Human Genome) sequencing industry, as well as in integration of Invitrogen and ABI, it makes sense to integrate life tech to GE’s Healthcare business”, person familiar with the deal said. GE’s healthcare business manufactures a broad range of medical equipments that enables doctors to identify early stages of cancers. It is not clear how the deal will be constructed.
Life Tech announced Thursday that it is closing its Camarillo facility and laying off an undisclosed number of workers. It also priced $1.5 billion of debt in three parts through Bank of America, Goldman Sachs and J.P. Morgan Thursday. According to a person familiar with the deal, it is not clear if these (activities) are related to the GE deal.
Life Tech’s CEO, Gregory T. Lucier, was the President and CEO at GE Medical Systems from 2000 to 2003. He received his B.S. in Engineering from Pennsylvania State University and an M.B.A. from Harvard Business School.
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