Genzyme has confirmed plans to sell genetic testing unit to LabCorp for $925m amid media rumours that 1,000 employees face redundancy.
In a statement released today the US biotech said it will sell Genzyme Genetics, a provider of reproductive and oncology testing services, to focus its resources on its core development business.
LabCorp, one of the US’ largest laboratory testing organisations, said that it will offer the 1,900 people employed by Genzyme Genetics jobs when the deal completes before the end of the year.
Genzyme said proceeds from sale of the unit, which was earmarked for sale along with its diagnostic and intermediates businesses this summer, “may be used to finance the second half of the company’s $2bn stock buyback to be completed by May 2011.”
Genzyme CEO Henri Termeer said: “This transaction demonstrates the strategic value of Genzyme Genetics and the strong franchise we’ve built over a twenty year period.”
“It also shows how our management team is uniquely positioned to unlock the underappreciated value of Genzyme’s diverse businesses for shareholders. The completion of this sale allows us to focus our resources on core growth areas and create stronger returns on invested capital.”
These comments are sure to attract the attention of French drugmaker Sanofi-Aventis which, after tabling a rejected $18.5bn offer, has begun appealing directly to Genzyme shareholders .
Genzyme job cuts?
Sanofi’s interested is also likely to be piqued by media reports that Genzyme plans to reduce its workforce by as many as 1,000 employees.
Although unconfirmed by the firm at this stage, according to a report in the Boston Globe, employees were told about the planned cutbacks in a memo sent late Friday which explained the move was designed to help Genzyme cut costs.
Genzyme VP Bo Piela told the paper that the firm will make a formal statement later this week.