California Genome Sequencing Company Set For Business Merger
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Monday, September 24, 2012.
The recent announcement of a merger agreement between a California-based company providing human genome sequencing technology and an overseas pharmaceutical company led to a 14.23 percent jump in shares of Complete Genomics Inc. stock. The business merger agreement calls for the California-based company to be acquired by a U.S. branch of the other company. While the deal had not been completely solidified at last report, it did seem to be a pretty sure thing.
One industry insider said that there could still be higher bids made for the company, but the fact that both the Genomics management and Board indicated support for the proposed merger meant it would likely go through. Apparently the company's share pricing had suffered since the middle of 2011. This could be partly because of competitors biting into their slice of the genomic outsourcing services pie.
The insider further thought that the merger announcement indicated that the company may have failed in negotiations with competitors in the industry. That could be one reason that the company seems to be moving toward the merger with China-based BGI-Shenzhen. Of course, the human genome sequencing company would benefit from the other company's resources gained in such a merger.
Hopefully, the announcement of this business merger will help the California company bounce back from some of the traction it had lost over the past months. Reportedly, the agreement between the two companies would solidify in early 2013. Often, merging a smaller company with a larger can lead to financial benefits for both companies moving forward.
Source: iStockAnalyst.com, "Complete Genomics (GNOM) Shares Jump After Merger Announcement," Sept. 17, 2012