Genzyme Announces Agreement to Sell Diagnostics Business to Sekisui Chemical Co.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Genzyme Corporation (Nasdaq: GENZ) today announced that it has entered into an asset purchase agreement under which Sekisui Chemical Co., Ltd. will acquire Genzyme’s Diagnostic products business for $265 million in cash.

Under the terms of the agreement, Sekisui will purchase substantially all of the assets of the business, including diagnostic product lines and technologies. Sekisui has agreed to offer employment to the unit’s approximately 575 employees upon closing, including senior management, and plans to maintain operations in all of the business’s current locations. Completion of the acquisition is subject to certain conditions, including entering into related license, transition services and supply agreements, clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions. The companies’ goal is to close the transaction by the end of the year.

“With this transaction, we are continuing to execute on our plan to increase value for shareholders,” said Henri A. Termeer, chairman and chief executive officer of Genzyme Corporation. “This sale is part of our strategy to sharpen the company’s focus and allocate our resources to key areas for our future growth such as manufacturing, our rare disease business, and our product pipeline.”

Genzyme announced in May that it would seek strategic alternatives for three business units as part of a five-part plan to increase shareholder value. The plan builds on the robust set of operational, organizational and board changes made over the past year to strengthen the company. In September, Genzyme announced the sale of Genzyme Genetics to Laboratory Corporation of America, and the company also plans to divest its Pharmaceuticals business unit. Proceeds from these transactions may be used to finance the second half of the company’s $2 billion stock repurchase.

Genzyme’s Diagnostics business provides critical raw materials and enzymes, clinical chemistry reagents, rapid tests and infectious disease products to manufacturers, clinical laboratories, distributors and health care providers. The business is focused on the cardiovascular, diabetes, renal, and infectious disease areas, and is a leading provider of HDL and LDL cholesterol tests. The business’s 2009 revenue was $167 million.

The terms achieved with Sekisui meet the three foundational goals Genzyme established for divestitures: (1) to recognize the value of employees with appropriate treatment as part of the transaction, (2) to create a future for the businesses in which customers continue to be served well, and (3) to maximize value for Genzyme shareholders.

“Genzyme Diagnostics has worked with Sekisui as a valued partner for more than 15 years,” Mr. Termeer continued. “This history ensures a level of continuity that will greatly benefit employees and customers. I am confident that Sekisui is the right strategic partner for Genzyme Diagnostics, and that in Sekisui’s hands the business will continue to grow.”

The business will be operated as part of Sekisui Medical Co., Ltd. which is a division of Sekisui Chemical. Sekisui Medical is based in Tokyo and is seeking to expand its global presence. Sekisui Medical has four businesses, which focus on diagnostic reagents, medical devices, pharmaceuticals and fine chemicals, and toxicology research.

Genzyme was advised by Credit Suisse and Goldman Sachs & Co on this transaction. The company’s legal adviser was Ropes & Gray.

About Genzyme

One of the world's leading biotechnology companies, Genzyme is dedicated to making a major positive impact on the lives of people with serious diseases. Since 1981, the company has grown from a small start-up to a diversified enterprise with nearly 10,000 employees in locations spanning the globe and 2009 revenues of $4.5 billion. In 2010, Genzyme was named to the Fortune 500.

With many established products and services helping patients in approximately 100 countries, Genzyme is a leader in the effort to develop and apply the most advanced technologies in the life sciences. The company's products and services are focused on rare inherited disorders, kidney disease, orthopaedics, cancer, transplant and immune disease. Genzyme's commitment to innovation continues today with a substantial development program focused on these fields, as well as cardiovascular disease, neurodegenerative diseases, and other areas of unmet medical need.

This press release contains forward-looking statements, including the statements regarding: the timing and potential benefits of the proposed transaction; plans to focus on and allocate resources to key areas for Genzyme’s future growth; Genzyme’s five-part plan to increase shareholder value; the planned divestitures of Genzyme Genetics and of Genzyme’s Pharmaceutical business unit; the use of the proceeds from the divestitures; and the completion and timing of the remaining portion of Genzyme’s $2 billion stock repurchase program. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. These risks and uncertainties include, among others, the possibility that certain closing conditions to the completion of any of the divestitures will not be met; that the divestitures and stock repurchase program do not occur in the anticipated timeframes, or at all, for any reason; that Genzyme’s five-part plan to create shareholder value, or any part of that plan, cannot be executed on or is otherwise ineffective; and the risks and uncertainties described in Genzyme's SEC reports filed under the Securities Exchange Act of 1934, including the factors discussed under the caption "Risk Factors" in Genzyme's Quarterly Report on Form 10-Q for the period ended September 30, 2010. We caution investors not to place undue reliance on the forward-looking statements contained in this press release. These statements speak only as of the date of this press release, and we undertake no obligation to update or revise these statements.

Genzyme Corporation
Media Contact:
Erin Emlock, 617-768-6923
Investor Contact:
Patrick Flanigan, 617-768-6563

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