Asahi Kasei scoops up Zoll for $2.2B, reflecting Japanese companies' hunger for growth

Japan's Asahi Kasei and Zoll Medical ($ZOLL) have inked a definitive merger agreement through which the former will buy the Chelmsford, MA-based company for $2.2 billion.

Through the cash deal, Asahi Kasei will buy all of Zoll's common stock for $93 per share. The transaction is expected to close in the second quarter; both boards have signed off on the plan.

The acquisition is part of Asahi Kasei's "Health Care for Tomorrow" project, which focuses on the development of new businesses through organic growth, targeted acquisitions and strategic alliances, according to a release. Asahi Kasei has named the resuscitation sector--a key market for Zoll--as an area of interest.

The buy could really benefit Asahi Kasei, because Zoll has big growth prospects. As The Wall Street Journal points out, its specialist product line experienced a compound annual growth rate of 79% over the last 6 years.

Last year, Asahi Kasei set aside ¥450 billion ($5.47 billion) for M&A and investments. The company, which derives a big chunk of its income from its chemicals and fibers businesses and homes and construction materials, hopes to boost the proportion of total operating income from healthcare to 13% by its 2015 fiscal year from 6% in 2010, Reuters notes.

Asahi Kasei's move seems to reflect its stated strategy of transforming its portfolio "through constant innovation in anticipation of emerging changes to market needs." Indeed, the company also appears to be following a similar trend as other Japanese companies. As The Wall Street Journal recently noted, local Big Pharma players have been especially active in seeking new acquisitions. In fact, the $200 billion spent on overseas buys the last four years is more than double that spent in the prior four-year period, Reuters reports. One of these acquisitions was Olympus' 2010 buyout of Redmond, WA-based Spiration for an undisclosed amount.

Boston seems to be a hot spot for these hungry Japanese companies, the Boston Globe notes. Takeda Pharmaceutical snapped up Millennium Pharmaceuticals for $8.8 billion in 2008, while Dainippon Sumitomo Pharma paid $2.6 billion to buy Sepracor the following year.

- see the press release
- check out the Reuters report
- read the Globe's take
- get the WSJ story