July 7, 2020 / 12:59 PM / a month ago

Japan's AGC weighs options after Italy puts conditions on Molmed deal

MILAN (Reuters) - Italy said it would use its right to intervene to protect strategic assets on the planned acquisition of biotechnology group Molmed (MLMD.MI) by AGC (5201.T), leaving the Japanese buyer to review whether to go ahead with its offer.

After the coronavirus outbreak, Rome bolstered “golden power” legislation against foreign takeovers by extending it to more sectors - including banking, insurance, health and food.

The rules allow the government to halt or impose conditions on investments in industries or infrastructure deemed of strategic interest.

In March, AGC launched a takeover bid for Molmed in a deal worth up to 240 million euros ($271 million).

The tender offer, set to close on July 24, is subject to a “golden power condition” that makes the deal dependent on Italy not applying such special measures.

AGC said on Tuesday that the Italian government had asked the companies to notify it of any intellectual property transfer agreement, to maintain R&D activities in Italy and not to cut jobs.

AGC said in a statement that it “is currently evaluating the content of the ministerial decree and will shortly disclose whether it intends to waive the golden power condition”.

Molmed is focused on research, development, production and clinical validation of gene and cell therapies for the treatment of cancer and rare diseases.

Molmed shares dropped over 10% after Italy’s government announced the use of its golden power but later recovered ground and were down 2.8% at 1440 GMT.

Reporting by Elisa Anzolin; editing by Jason Neely and Keith Weir

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