Salix Pharma To Combine With Cosmo Technologies Ltd.

(RTTNews) - Salix Pharmaceuticals, Ltd. (SLXP) and Cosmo Pharmaceuticals S.p.A., announced a definitive merger agreement under which Salix will combine with Cosmo Technologies Limited, a subsidiary of Cosmo.

Going by the terms of the agreement, Salix will become a wholly-owned subsidiary of Irish domiciled Cosmo Tech, which will change its name to Salix Pharmaceuticals, plc. The transaction is expected to be modestly accretive to Salix's earnings per share in 2016 and increasingly accretive thereafter.

Salix Pharmaceuticals, plc will own Cosmo's U.S. patents for rifamycin MMX®, methylene blue MMX® and Uceris®, and have specified rights of negotiation with respect to all products Cosmo or its affiliates seek to develop or commercialize in the U.S.

In addition, it has been noted that Salix Pharmaceuticals, plc will acquire Cosmo's patents for rifamycin MMX in Canada, specified Latin American countries, India, China, Japan and the rest of the Far East, excluding Australia and New Zealand, and Cosmo's patents for Uceris in Japan.

Upon completion of the merger, shareholders of Salix are expected to own slightly less than 80% of the ordinary shares of Salix Pharmaceuticals, plc and Cosmo is expected to own slightly more than 20%. Shareholders of Salix will receive one ordinary share of Salix Pharmaceuticals, plc in exchange for each share of Salix Pharmaceuticals, Ltd common stock they own at closing.

Also, in connection with the merger, Cosmo will continue to supply Uceris to Salix and will also supply rifamycin MMX and methylene blue MMX. The transaction, which will be taxable to Salix's shareholders, is expected to close in the fourth quarter of 2014.