DOW JONES NEWSWIRES Biotechnology company Alkermes Inc (ALKS) Monday said it will merge with Elan Drug Technologies (EDT), a unit of Elan Corp. (ELN), in a cash and stock transaction valued at $960 million. Alkermes and Elan Drug Technologies will be combined under a new holding company incorporated in Ireland, to be called Alkermes Plc, Alkermes and Elan said in a joint statement. As part of the transaction, which has been approved by the boards of Alkermes and Elan, Elan will receive $500 million in cash and a 25% equity stake in Alkermes Plc. The merger is expected to be immediately accretive to cash earnings and the combined company is expected to have revenue in excess of $450 million annually. "The merger will be financially transformative and create a profitable, global biopharmaceutical company with a diversified CNS (central nervous system) product portfolio and a strong foundation for growth," Alkermes Chief Executive Richard Pops said in the statement. Pops will become the chairman and chief executive of the new entity. In the merger transaction, existing shareholders of Alkermes will receive one ordinary share of Alkermes Plc in exchange for each share of Alkermes they own at the time of the merger. Alkermes Plc shares will be registered in the U.S. and are expected to trade on the NASDAQ . Alkermes has obtained a commitment from Morgan Stanley & Co. and HSBC to provide up to $450 million of term loans to finance the transaction, which is expected to close during the third quarter of 2011, subject to shareholder and regulatory approvals.
