Pharmaceutical companies Vectura (VEC) and SkyePharma (SKP) have announced a merger that will create an industry-leading specialist in inhalation devices for people with respiratory diseases such as asthma. It's a deal that is likely to lead to significant cost savings and, as the groups have complementary product portfolios, certainly seems like a good decision.
The merger will create a company valued at around £1bn, and with a much more competitive position to take advantage of the $35bn (£25bn) inhalation devices market.
The deal values SkyePharma's shares at 410p, a 4 per cent premium to the share price before news of the merger broke. It's therefore unsurprising that SkyePharma's share price rose on Wednesday morning, especially as the announcement came alongside strong financial results. Vectura's share price also saw an upswing in response to the news.
Both groups have impressed us in the past few years as sales have gathered momentum, and the merger is likely to help push up profitability. Await documents.
