Genzyme to Sell Genetics Unit to Labcorp for $925 million

U.S. biotech firm Genzyme said it agreed to sell its genetic-testing business to Labcorp of America Holdings for $925 million in cash.

Genzyme, which recently rejected a takeover bid from French drugmaker Sanofi-Aventis, said its plan to divest two other units - diagnostic products and pharmaceutical intermediates - stays on track and proceeds from the deals may be used to fund the second half its $2 billion stock buyback.

In a separate statement, Labcorp said the deal has a net cash cost of about $795 million to the medical-testing company. Labcorp said it obtained a funding commitment from Citi to provide debt financing for the transaction.

Labcorp will buy the entire business, called Genzyme Genetics, including all testing services, technology, intellectual property rights and testing laboratories.

Labcorp also committed to offer jobs to the unit's nearly 1,900 employees, including senior management, upon closing, Genzyme said. Genzyme Genetics had revenue of $371 million in 2009. In May, Genzyme had said it would try to sell its three noncore businesses in
an effort to win back investors' confidence.

Cambridge, Massachusetts-based Genzyme was advised by Credit Suisse and Goldman Sachs, while Citi and Lazard acted as
financial advisers to Labcorp.