Jazz Pharmaceuticals to buy GW Pharmaceuticals for $7.2bn

Jazz Pharmaceuticals has agreed to buy GW Pharmaceuticals for $7.2bn.

Under the terms of the deal, which is expected to close in the second quarter of the year, Jazz will pay $220 per American Depositary Share of GW, in the form of $200 in cash and $20 in Jazz shares. This represents a 50% premium over GW's closing share price on Tuesday.

Jazz said the combined company "will be a leader in neuroscience with a global commercial and operational footprint well positioned to maximise the value of its diversified portfolio".

The combination is expected to provide accelerated double-digit top-line revenue growth and to be accretive in the first full year of combined operations, and substantially accretive thereafter, Jazz said.

The company’s chairman and chief executive officer, Bruce Cozadd, said: "Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business. We are excited to add GW's industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities.

"Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies' shareholders and patients."

GW shares surged 46% in pre-market trade to $213.50.