Oxford Asymmetry agrees to German merger worth £316m

Shares in Oxford Asymmetry, the chemical services company, surged 17 per cent yesterday after it said German-listed Evotec BioSystems will take it over in a deal valuing the British company at £316m.

Shares in Oxford Asymmetry, the chemical services company, surged 17 per cent yesterday after it said German-listed Evotec BioSystems will take it over in a deal valuing the British company at £316m.

The all-share deal - the first buy-out of a UK company by a German rival in the biotechnology sector - ends weeks of speculation about who would emerge the successful bidder for Oxford, which produceschemicals for partners such SmithKline Beecham and Biogen, maker of the world's best-selling multiple sclerosis drug.

Evotec will pay 722p a share, a 26 per cent premium on Oxford's closing price on Friday and 46 per cent more than its closing on 17 July, when the shares began climbing on the takeover speculation.

Shares in the combined group will be listed on Germany's hi-tech Neuer Markt index. The group will then seek a listing on Nasdaq in the US.

Oxford said it had been talking to a number of interested parties, but selected Evotec because the two companies' specialisms should compliment each other, creating a "one-stop shop" for drug development companies to take a drug from the earliest stages through to laboratory trials.

Evotec provides a service allowing companies to screen chemicals at high speed. This enables them quickly to determine which chemicals produce a reaction in the body that may halt processes such as the development of cancer cells, and to develop them as drugs.

An Oxford spokesman said: "It takes up to 12 years to develop a drug. This tie-up will speed up the process and help companies reach their target of reducing that to about six years."

Oxford Asymmetry's chief executive, Edwin Moses, will become president of the enlarged company. His German counterpart, Dr Karsten Henco, will become chief executive and chief scientific officer. Holders of each Oxford share will receive 0.18 new Evotec shares.

Oxford shares eventually closed up 76p at 647.5p.