Novo Holdings, the parent company of Danish drugmaker Novo Nordisk, has agreed to acquire Catalent, a US-based contract development and manufacturing organisation (CDMO), for $16.5bn.

Under the terms of the merger deal, Novo Holdings will buy all the outstanding shares of Catalent for $63.50 per share in cash, which is a 16.5% premium to Catalent’s last closing price.

The merger is expected to close towards the year-end 2024, subject to customary closing conditions, including approval by Catalent stockholders and receipt of regulatory approvals.

Until the transaction is completed, Catalent will continue to operate as an independent entity, separately from Novo Holdings and Novo Nordisk.

Novo Holdings CEO Kasim Kutay said: “With our expertise and track record of investing in high-quality life sciences businesses, we believe Catalent is a very good strategic fit.

“We are excited to support the Company’s stakeholders in the years ahead, especially employees and customers as they work to develop new products to benefit patients.

“As engaged investors committed to productive relationships with all our partners, we look forward to working with the Catalent team to realise the Company’s full potential.”

As part of the transaction, Novo Nordisk has agreed to acquire Catalent’s three fill-finish sites from a subsidiary of Novo Holdings, for an upfront payment of $11bn.

The three manufacturing sites to be acquired by Novo Nordisk are located in Anagni, Italy; Brussels, Belgium; and Bloomington, Indiana, US, and employ more than 3,000 people.

The upfront payment includes enterprise value for the sites, along with additional value for certain corporate assets and liabilities of the acquired business.

Novo Nordisk president and CEO Lars Fruergaard Jørgensen said: “We are very pleased with the agreement to acquire the three Catalent manufacturing sites which will enable us to serve significantly more people living with diabetes and obesity in the future.

“The acquisition complements the significant investments we are already doing in active pharmaceutical ingredients facilities, and the sites will provide strategic flexibility to our existing supply network.”

Novo Nordisk and Catalent share a long-standing relationship, where the CDMO is the primary manufacturer of Novo Nordisk’s injection pens and is responsible for their filling and packaging.

With the addition of Catalent’s filling sites, the Dutch drugmaker can enhance its capacity to supply its popular weight loss medication Wegovy and diabetes treatment Ozempic.

The acquisition will help expand its manufacturing capacity at scale while providing future optionality and flexibility for its existing supply network, said Novo Nordisk.

Evercore served as an independent financial advisor to Novo Nordisk and offered a fairness opinion to the company’s Board of Directors, on the transaction.

Catalent president and CEO Alessandro Maselli said: “Over the past several years, Catalent has built a comprehensive end-to-end offering of services and capabilities to drive innovation in the healthcare system and improve patient outcomes.

“This transaction is a testament to our team’s hard work and dedication to this mission, and I am incredibly excited for this next step in our journey.

“We look forward to benefiting from Novo Holdings’ significant resources to accelerate investment in our business and enhance key offerings as we continue to offer premium development and manufacturing solutions for pharma and biotech customers.”