Charles River Laboratories International (CRL.NYSE) has agreed to buy China’s WuXi PharmaTech (WX.NYSE) for US$1.6 billion in what is set to become the largest foreign takeover of a Chinese company, Bloomberg reported. The acquisition would give the US firm a foothold in the Chinese market, where revenue from drug-testing services is growing by up to 30% a year. WuXi PharmaTech has testing facilities in Shanghai, Suzhou and Tianjin. It counts Pfizer, Merck, Novartis and AstraZeneca among its customers. Charles River will pay US$21.25 a share – US$11.25 in cash and US$10 in stock – for each WuXi American depository share. The offer is 28% more than WuXi’s closing price on April 23. James Foster, CEO of Charles River, noted that all the major international drug companies are building out their operations in China. He cited lower costs and a large supply of trained scientists as the principal attractions.
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