Rivian Break Down Of Joint Venture Negotiations With Mercedes | Amgen Inc. Begins Action to Acquire Pharmaceutical Company Horizon Therapeutics
Aa
Share
Rivian discontinues its partnership with Mercedes-Benz Group and Amagon Inc begins merger talks with Horizon Therapeutics.
Joint Venture Negotiations
In September, Rivian and Mercedes-Benz Group said they were entering into negotiations for a potential joint venture at a Mercedes plant in Poland that would produce vans for both automakers.
Rivian, in a statement early Monday, said the breakdown of joint venture negotiations with Mercedes comes after reassessing growth opportunities and focusing on projects that promise the best "risk-adjusted" return on investment.
“We’ve decided to pause discussions with Mercedes-Benz Vans regarding the Memorandum of Understanding we signed earlier this year for joint production of electric vans in Europe,” Rivian CEO RJ Scaringe said.
The CEO of Rivian, said the startup is focusing on projects that give it the best return on investment in the short term. The startup said it believes its current sales of trucks and SUVs to retail customers and the van deal it has with Amazon.com Inc. , are best positioned to increase profitability in the near future.
Rivian said he would be willing to make a deal with Mercedes at a later date.
Rivian went public last November amid a flurry of initial bids by bustling EV startups promising to turn the auto industry upside down. The Irvine, California-based company was briefly worth more than Ford Motor Co.
Capital markets have since deteriorated for many of these firms, including Rivian. The company's shares are down about 84% from the peak.
Not only is the company looking bad on the stock markets, the internal situation reflects this as well.
Rivian sometimes had difficulty carrying out his plans. In March, the company cut its production guidelines to around 25,000, citing parts shortages and supply chain issues.
The company reported a total net loss of $5 billion in the first three quarters of this year.
Rivian has laid off about 6% of its staff this summer and cut expenses in an effort to save cash. The company's cash stack - about $17 billion at the end of March - shrunk to $13 billion at the end of September, the last period for which information is available.
What's more, the start-up also angered customers by deciding to raise the prices of its products, even those reserved.
Rivian quickly reversed the price increase for existing reservation holders, but the lower selling cost of those early orders contributed to losses this year.
Rivian's share price is approaching its lowest level of the year. RIVN is currently trading at 27,290.
The biggest merger in year is in horizon
Horizon develops drugs to treat rare autoimmune and severe inflammatory diseases that are currently sold primarily in the United States. Its biggest drug, Tepezza, is used to treat thyroid disease, a disease characterized by progressive inflammation and damage to the tissues around the eyes.
Last year, revenue from Tepezza more than doubled, increasing Horizon's overall net sales by 47% to $3.23 billion. Horizon said the drug's annual global net sales are expected to eventually reach more than $4 billion as the company looks to gain approval to sell the drug in Europe and Japan.
The company is listed on Nasdaq but is based in Ireland with operations in Dublin, Deerfield, Illinois, and a new facility in Rockville, Maryland.
Horizon said last month it was interested in acquiring from Amgen, Sanofi and Johnson & Johnson. Johnson & Johnson later said it had dropped out. The US biotech firm was the last of three competitors standing in the auction for Horizon, people said, after French drugmaker Sanofi SA said on Sunday it was being sidelined.
For this reason, Amgen Inc. is already in advanced talks regarding the purchase of the pharmaceutical company Horizon Therapeutics. The merger is likely to be valued at more than $20 billion.
According to Jefferies & Co., the Horizon acquisition could bring Amgen approximately $4 billion in new revenue by 2024.
The deal for Horizon would likely be the largest global healthcare acquisition in 2022, surpassing the Johnson & Johnson-Abiomed tie-up.
From August to the first half of November, HZNP's share price was at its lowest of the year, but then increased, and the current price level is around 97.
Amgen Inc prices have been dropping recently and the current level is 285.57.
Chart of Horizon Therapeutics shares
Chart of Amegon Inc shares
Source: wsj.com, finance.yahoo.com
