Serono joins acquisition trail after abandoning auction

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The Independent Online

The British pharmaceutical giant GSK had been among those looking to snap up the Swiss company for a cut price of between $11bn (£6.3bn) and $12bn after an earlier auction of up to $15bn failed to attract buyers.

Novartis, Switzerland's largest drug maker, was at one stage seen as a front-runner to acquire Serono while Britain's AstraZeneca as well as the US drug makers Pfizer, Johnson & Johnson and Wyeth were also thought to be interested. Pfizer already has a marketing alliance with Serono for the multiple sclerosis drug Rebif.

The Bertarellis, the Swiss family that owns 62 per cent of Serono, put the business up for sale in November and hired Goldman Sachs as advisers after suffering setbacks on a number of experimental drugs last year. It also faces growing competition on its best-selling drug, Rebif, which along with infertility treatments accounts for the bulk of its sales. Last year, it posted turnover of $2.6bn and underlying net income of $560m. Its drug pipeline is still regarded as thin, despite intense efforts to broaden it by buying in new products.

Ernesto Bertarelli, the chief executive, is thought to have a war chest of up to $10bn for acquisitions. Stuart Grant, Serono's finance chief, said: "We're actively looking at what's on the market. We're not adverse to a single large acquisition, neither are we adverse to multiple smaller transactions."

Serono had about $1.5bn in cash or cashable assets at the end of last year and the company reiterated an end-of-March announcement that it would raise 7.3bn Swiss francs (£3.2bn) in new capital for acquisitions and investments in existing businesses. Analysts said targets could include UCB, the Belgian maker of the allergy drug Zirtek, as well as Germany's Altana or Merck, whose bid for the German rival Schering was trumped by Bayer last month.

Serono's troubles have fuelled speculation that Mr Bertarelli, 40, may step down.

Shares in Serono closed down 8.4 per cent at 845 Swiss francs.

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