By Dominic Chopping and Chris Wack


Novo Holdings, the controlling shareholder of Danish pharmaceutical giant Novo Nordisk that makes weight-loss drug Wegovy, is buying drug manufacturer Catalent for $11.5 billion in cash.

Novo Holdings said Monday that it will buy New York-listed Catalent for $63.50 a share in cash, a premium of 16.5% to Catalent's closing price on Friday and a 47.5% premium to the 60-day volume-weighted average price as of Friday. It will also take on Catalent's debt, valuing the acquisition at $16.5 billion.

In connection with the deal, Novo Nordisk has moved to boost its production capacity by agreeing to buy three of Catalent's manufacturing sites from Novo Holdings for $11 billion.

Catalent is a contract manufacturer for the pharmaceutical industry and operates fill-finish sites, filling and packaging drugs for clients, including Novo Nordisk.

Novo Nordisk will buy three fill-finish sites that will allow it to increase manufacturing capacity of its diabetes and obesity treatments while providing flexibility in its existing supply network, it said.

The sites--which all have current collaborations with Novo Nordisk--are in Italy, Belgium and the U.S., and employ more than 3,000 people combined.

The popularity of Wegovy has seen the company restrict supply as it scrambles to increase stocks. In recent months, it has outlined plans to invest more than $6 billion to increase capacity. Last month, it began gradually increasing supplies of lower-dose strengths, having limited supply in the U.S. since May to safeguard access for current patients.

Monday's acquisition won't be a quick fix, however, as the company doesn't expect the deal to increase its filling capacity until 2026. It warned last week that continued periodic supply constraints and drug-shortage notifications are expected to continue.

Novo Holdings' takeover of Catalent marks the end of a turbulent spell for the contract drugmaker. After playing a crucial role in the rapid mass production of vaccines during the Covid-19 pandemic, it then faced productivity issues and higher-than-expected costs that weighed heavily on earnings last year.

It subsequently reached an agreement with activist shareholder Elliott Investment Management to appoint four new independent directors to its board.

"As a significant investor in Catalent, Elliott fully supports the transaction announced today," said Marc Steinberg, partner at Elliott.

Acquisition of the sites will be completed following the merger of Catalent and Novo Holdings, expected toward the end of 2024.

Following the closing of the merger, Catalent shares will no longer trade on the New York Stock Exchange, and it will become a private company.

Novo Holdings is the holding and investment company responsible for managing the assets and wealth of the Novo Nordisk Foundation. It had total assets of 108 billion euros ($116.5 billion) at the end of 2022, the most recent data available shows.


Write to Dominic Chopping at dominic.chopping@wsj.com


(END) Dow Jones Newswires

02-05-24 0950ET