FRANKFURT/BERLIN, May 18 (Reuters) - Fresenius SE’s chief executive has defended the company’s decision to pull out of a planned $4.8 billion takeover of Akorn, saying it was the only option after uncovering data integrity breaches at the U.S drugmaker.
“It was certainly not an easy decision, but ultimately there was only one correct course,” CEO Stephan Sturm said at Fresenius’ annual shareholder meeting in Frankfurt on Friday.
The German healthcare group called off the acquisition in April after it said it had found Akorn breached U.S. Food and Drug Administration data integrity requirements related to product development.
Akorn disagrees with the allegations and has said Fresenius wants to back out of a deal it soured on for financial reasons. It is suing Fresenius to try and hold the German company to the deal.
Sturm, a former investment banker who joined Fresenius as chief financial officer in 2005 and has led the firm since 2016, rejected suggestions the company had not done its homework ahead of the deal.
“You might say, ‘Couldn’t you have found out before? Did you really take a close look at Akorn before making your purchase offer?’,” he said.
“Yes, we did: we looked very closely. In fact, the due diligence undertaken was the most intensive that I have experienced at Fresenius.”
He said the deficiencies it later uncovered were in areas Fresenius was not allowed to access before the deal because Akorn was a listed, direct competitor.
Concern about possible pricing pressure at its Kabi generics business and worries about Akorn following worse-than-expected performance since the deal was announced pushed Fresenius’ shares down 12 percent in 2017.
The shares have traded slightly higher since Fresenius terminated the deal.
A hearing is expected to take place in Delaware Court of Chancery on July 9 regarding the complain Akorn has filed against Fresenius.
“We think that our decision to terminate the agreement was right and fully justified. And we will defend our position vigorously,” Sturm said. (Reporting by Patricia Weiss and Caroline Copley; editing by Jason Neely)