Cambridge, Mass.-based Genzyme said that under the terms of the agreement, LabCorp will purchase the genetic testing business in its entirety, and is committed to offer employment to the unit's approximately 1,900 employees upon closing, including senior management. Genzyme Genetics, which had revenue of $371 million in 2009, provides reproductive and oncology testing in the U.S. LabCorp is one of the nation's largest laboratory testing companies.
"This transaction demonstrates the strategic value of Genzyme Genetics and the strong franchise we've built over a twenty year period," said Chairman and CEO Henri Termeer. "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."
Genzyme, which has been courted by Sanofi-Aventis (SNY) lately, said Friday it will eliminate 1,000 jobs, about 10% of the workforce, over the next 15 months to cut costs, according to the Boston Globe. With activist shareholder investors such as Carl Icahn and Ralph Whitworth, the biotech has been under increasing pressure to increase shareholder value. The divestitures, the stock buyback and the layoffs are part of the steps management has taken.
Meanwhile, French pharmaceutical Sanofi-Aventis said it has arranged about $10 billion of underwritten loans to back its bid for the U.S. biotechnology company, Bloomberg reported. But so far, the two have remained far apart on price with Sanofi offering $69 per share, and reports suggest Genzyme won't accept anything below $75 a share. So far, Genzyme has spurned all of Sanofi's attempts -- official and not.