Delaware Supreme Court Upholds Ruling Allowing Fresenius to End Akorn Deal -- Update

   By Colin Kellaher

The Delaware Supreme Court on Friday said German health-care company Fresenius SE (FRE.XE) can walk away from its $4.3 billion deal buy generic-drug maker Akorn Inc. (AKRX), sending Akorn shares down more than 20%.

Fresenius in April said it was terminating the deal, struck a year earlier, because Akorn hadn't fulfilled several closing conditions and because it found material breaches of Food and Drug Administration data-integrity requirements relating to Akorn's operations during its independent investigation.

Akorn sued Fresenius seeking to enforce the deal, but a Delaware Chancery Court upheld the termination. Akorn appealed the ruling, arguing that the court erred in several ways.

However, the Delaware Supreme Court on Friday said the record supports the lower court's finding that Akorn "had suffered a material adverse effect...that excused any obligation on Fresenius's part to close," and that Fresenius had properly terminated the merger.

A spokesman for Fresenius said the company had no immediate comment on the ruling. Representatives from Akorn weren't immediately available for comment.

Shares of Akorn fell 23.8% in Friday morning trading to $4.26, some 87% below the $34 a share Fresenius has agreed to pay for the company.

German-listed shares of Fresenius, which have traded lower all day after the company late Thursday adjusted its midterm guidance and warned it would miss its 2020 group targets, were off 17.7% to EUR38.99.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

December 07, 2018 12:07 ET (17:07 GMT)

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