Street Calls of the Week
Investing.com-- South Korea’s Celltrion Inc (KS:068270) said on Tuesday it has signed a deal to buy Eli Lilly’s (NYSE:LLY) biologics manufacturing facility in the U.S. for about 460 billion won ($330 million), in a move aimed at bolstering its U.S. presence and reducing tariff exposure.
The facility, located in Branchburg, New Jersey, will be acquired through Celltrion’s U.S. subsidiary, with additional operational funds bringing the total investment close to 700 billion won, the company said in a letter to shareholders.
Celltrion said the deal would allow it to start operations more quickly than building a new site and achieve significant cost savings.
The acquisition comes as the Korean drugmaker steps up efforts to mitigate risks from U.S. tariffs. Celltrion said it has already transferred two years of inventory to the U.S. and expanded local contracts to eventually manufacture and supply products directly in the U.S.
"With this acquisition, Celltrion has fundamentally and fully eliminated all potential future tariff risks related to its products in the U.S. market," the letter said.
The company expects to close the transaction by the end of this year, pending regulatory approvals.
Seoul-listed Celltrion shares rose as much as 2% to 172,500 won in early trade on Tuesday.