Pharmaceutical research firms Charles River Laboratories (CRL.NYSE) has withdrawn from its proposed US$1.6 billion acquisition of China’s WuXi PharmaTech (WX.NYSE) in the face of anticipated rejected by shareholders, the Wall Street Journal reported. Charles River will pay WuXi US$30 million in breakup fees but avoid additional fees that would have been incurred had the acquisition proposal been officially rejected by shareholder vote or a reversal by the board. The deal was announcedd in April, and had it gone through it would have created one of the largest drug-research contractors in the world covering the lifespan of drug development. But major shareholders in Charles River were opposed, suggesting the price was too high and that the risks tied to post-merger integration had not been properly accounted for. Charles River CEO James Foster maintains that the deal would have paid off in the long term by giving the firm a foothold in the expanding Chinese pharmaceutical research market.
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