What is the primary reason for terminating the Shareholders' Agreement of Kirin-Amgen?

The Shareholders' Agreement is being terminated because Amgen is becoming the sole shareholder of Kirin-Amgen. This is achieved through Kirin-Amgen redeeming all of Kirin Holdings' shares in the joint venture.

What is the total financial impact of this transaction on Amgen?

Kirin-Amgen will pay $780 million to Kirin Holdings. Additionally, Amgen will pay other consideration valued at approximately $30 million, contingent on certain future sales. While Kirin-Amgen is undertaking the primary payment, this impacts the overall control and value shift for Amgen.

When is this transaction expected to be finalized?

The redemption is expected to close during either the fourth quarter of 2017 or the first quarter of 2018. This timeline is dependent on the fulfillment or waiver of all conditions outlined in the redemption agreement, including receiving necessary governmental approvals.

What does Amgen gain from this transaction?

Amgen gains full, sole ownership of Kirin-Amgen. This simplifies its corporate structure, removes the need for a joint venture agreement, and gives Amgen complete control over Kirin-Amgen's operations and future.

AMGN 8-K: Material Agreements

Summary

Amgen Inc. (AMGN) announced the termination of the Shareholders' Agreement for its 50-50 joint venture, Kirin-Amgen, effective October 30, 2017. This termination is a direct result of Kirin-Amgen redeeming all shares held by its partner, Kirin Holdings Company, Limited. Consequently, Amgen will become the sole shareholder of Kirin-Amgen. The financial implications involve Kirin-Amgen paying $780 million to Kirin Holdings, and Amgen will provide additional consideration valued at approximately $30 million upon the occurrence of certain sales events. This strategic move simplifies Amgen's ownership structure and eliminates the need for the now-obsolete Shareholders' Agreement. The transaction is anticipated to close in late 2017 or early 2018, subject to regulatory approvals and other closing conditions.

Key Highlights

1Amgen Inc. is terminating the Shareholders' Agreement of its 50-50 joint venture, Kirin-Amgen.
2The termination is driven by Kirin-Amgen redeeming all its shares from its partner, Kirin Holdings Company, Limited.
3Following the redemption, Amgen will become the sole owner of Kirin-Amgen.
4Kirin-Amgen will pay $780 million to Kirin Holdings as part of the redemption.
5Amgen will provide an additional $30 million in consideration tied to future sales.
6The transaction is expected to close in Q4 2017 or Q1 2018, pending necessary approvals.

AMGEN INC 8-K Report, Agreement Terminated (Oct 31, 2017)

Summary

Key Highlights

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